How Operators Can Maximize Partnerships with LTC Medical Groups

In recent years, we’ve seen a proliferation of specialized medical groups that primarily (or exclusively) serve long-term care (LTC) residents. There are both demand and supply factors fueling this growth.

On the demand side, nursing home and assisted living operators have been looking for primary care solutions as community-based PCPs spend less time in facilities. Additionally, these groups bring much-needed expertise and resources to bolster overstretched LTC clinical teams.

At the same time, private equity investments have provided a supply-side boost to LTC medical group growth. This capital is fueled by interest in the margins generated by accountable care organizations (ACOs), Medicare Advantage Institutional Special Needs Plans (I-SNPs), and other risk-bearing arrangements operated by these groups.

As the LTC medical group sector has grown, so too have expectations for what these groups will deliver in terms of superior clinical outcomes and increased revenue for LTC operators. In part, these outsized expectations stem from LTC medical groups overselling the benefits they can deliver. But LTC operators also enter into partnerships without clearly understanding what they’ve signed up for.

The stakes are getting higher. As the number and variety of LTC medical groups continue to grow, choosing a partner is becoming less about simply filling a clinical coverage gap and more about making a strategic decision about how care will be delivered—and how the organization will participate in the emerging value-based care (VBC) landscape.

In this piece, I want to briefly highlight where LTC operators frequently go wrong and the steps they can take to maximize the clinical, financial, and strategic value of partnerships with LTC medical groups.

Rushing into partnerships without defining goals…

In an ideal world, LTC operators would define the specific clinical and business challenges they are looking to solve and survey the field to identify partners with the right solutions before initiating serious conversations with LTC medical groups.

But this isn’t how it works in the real world. Most LTC operators don’t start thinking about their goals and priorities until they’ve already initiated partnership discussions with an LTC medical group that reached out to them. Rather than take a comprehensive, disciplined approach, many LTC operators treat the deal that an LTC medical group puts in front of them as their best (and perhaps one and only) opportunity to participate in value-based care.

Critical questions go unanswered:

• What are we actually trying to solve through an LTC medical group partnership?

• Are our needs primarily clinical (e.g., augmenting our clinical teams, improving outcomes on key quality measures)?

• Are we also expecting the partnership to be a significant source of new revenue and a gateway to value-based care?

For most LTC organizations, the answer to these questions is “yes”—they want the LTC medical group partnership to yield both clinical and financial benefits. But here are the toughest questions LTC executives often overlook: How committed are we to fundamentally changing the way we deliver care and manage our residents to achieve success in a VBC environment? And what is our tolerance for financial risk?

Underwhelming results do not necessarily mean that the medical group has failed to deliver its end of the bargain. The partnership may not have been structured the right way to create the conditions for success, or the LTC organization may not have made the necessary clinical and operational changes to drive down hospitalizations and reduce unnecessary use of medications.

A medical group cannot, by itself, transform an LTC organization’s approach to care delivery.

…or surveying the field to find the right partner

Here’s another shortcoming: few LTC organizations do their homework to determine which LTC medical group best meets their needs.

To be fair, medical group options may be limited in smaller, less-developed healthcare markets. But in an increasing number of markets, there are a few different groups specializing in LTC-focused care that could be viable options. Even groups that aren’t currently in a given market will consider partnerships in new geographies. (Remember: several of these groups are investor-backed and eager to expand!)

“LTC medical group” is a catchall term for an incredibly diverse array of provider groups, and the differences run deeper than most executives appreciate at the negotiating table.

Some groups are built on a physician-led "SNFist" model—essentially the hospitalist model transplanted into the nursing home, with physicians driving high-acuity management and medical direction. Others run a nurse practitioner-led model where advanced practice providers (APPs) handle the majority of facility visits under physician oversight, prioritizing coverage density and consistency over physician-to-patient ratios.

The groups also vary in terms of their economic models and willingness to share the financial upside (and downside) of VBC arrangements. Some groups remain firmly fee-for-service, essentially selling attending and medical director coverage as a service line. By contrast, other groups have built or acquired their own Institutional SNPs (I-SNPs) and have full capitated risk contracts with payers. This changes not just how the group gets paid, but what the onsite team is actually incentivized to do. Still others sit in between, participating in ACOs or accepting delegated risk contracts from payers without owning a plan.

These differences matter because the clinical model and economic model together determine what the medical group is actually incentivized to deliver. Understanding the specific capabilities and limitations of a potential medical group partner, and how these fit with the specific problems an LTC organization is looking to solve, is a critical but often overlooked step.

The questions every LTC executive team should ask

Whether you are considering your first partnership with an LTC medical group or looking to get more value from an existing relationship, the starting point is the same: be clear about what you want the partnership to accomplish—and what you are willing to change to achieve it.

The following questions can help LTC leaders assess potential partners, set realistic expectations, and identify opportunities to strengthen an existing partnership:

• What problems are we actually trying to solve? Are our priorities improving clinical outcomes, strengthening onsite clinical capabilities, reducing avoidable hospitalizations, improving the resident experience, generating new revenue—or some combination of these?

• What type of clinical model best meets our needs? Do we need medical director-led clinical oversight and high-acuity management, greater day-to-day APP coverage, stronger medical direction, or a combination of capabilities? How do our existing primary care and specialist partners fit into the clinical model?

• What do we expect the medical group to own—and what will we own? Have we clearly defined responsibilities for clinical decision-making, care management, quality improvement, data and analytics, and relationships with payers and other providers?

• What are the economics of the partnership—and are they aligned with our goals? How does the medical group make money today, where does the potential value come from, and how much of that value will actually accrue to the LTC organization?

• How much change and risk are we willing to assume? If the goal is to generate meaningful value through ACOs, I-SNPs, or other VBC arrangements, are we prepared to change clinical workflows, engage our frontline teams, use data differently, and hold ourselves accountable for outcomes? And how much financial risk are we prepared to assume today versus over time?

• Are we tracking the right metrics to assess the value of our partnership? Do we have a small set of shared clinical, operational, resident, and financial metrics that allow both organizations to assess progress—and make changes when results fall short?

• How should the partnership evolve? Are we building toward a deeper strategic relationship, or is the goal primarily to provide clinical coverage? If our ambitions change, can the partnership and economic model evolve with them?

The best LTC medical group partnerships are not simply vendor relationships. They are deliberate partnerships between organizations with shared goals, complementary capabilities, and aligned incentives.

For LTC leaders considering a new partnership—or questioning whether an existing one is delivering its full potential—a closer look at these questions can help clarify where the opportunity really lies. The right partnership is not necessarily the one that promises the most. It’s the one where the LTC operator and medical group partners have aligned on the clinical model, economic incentives, capabilities, and expectations for both sides of the partnership.

If you’d like to discuss these issues in more depth, please contact Fred at fred@bentleyhealthstrategies.net. Fred Bentley is founder and managing principal of Bentley Health Strategies LLC, a consulting firm focused on growth and innovation in post-acute care.