Alan Fairbanks

Scott

Hi, I'd like to welcome to our episode this VERSED podcast, Alan Fairbanks, who's the president of the Value-Based Care Alliance at Serviam Care Network. Hey, Alan, thanks for being on our podcast.

Alan

Great to be here. Thanks for having me, Scott.

Scott

Hey, we've known each other a long time and through some prior roles when I was at the National Center for Assisted Living and you were at Bickford full-time and you since transitioned some of your work over there to Serviam. Tell us about your background and for Bickford, as an operating company.

Alan

I've spent about 35 years in the senior housing space. I actually started as a director, administrator in skilled nursing right out of grad school. Spent about five years with Beverly Enterprises at the time, which is now Golden Living. Did an internship in graduate school, thought I was going into hospital administration, did an internship at a 420 bed skilled nursing home, and fell in love with working with the elderly, and I've been doing that ever since. So I spent about five years in skilled nursing world, transitioned into assisted living, will be 28 years ago in January that I've been with Bickford. So a lot of different roles with Bickford from director to divisional to currently I am a member of the management team and a member of the ownership team. Just recently here in the last really three months I guess I've transitioned full-time to Serviam, oversee all of their network services and specifically as it relates to value-based care.

Scott

For our listeners, I think you can already tell why I was so excited to have you on, you bring such a great perspective from different components of the continuum to this discussion on value-based care. So tell us a little about Serviam and where you operate and kind of services you provide, and who's in the network.

Alan

Serviam was birthed actually out of a conversation we had at Bickford Senior Living. We were in the middle of Covid and we were getting crushed like every other senior living operator in the space. And we met as a leadership team at Bickford with the frame of let's not waste a good crisis. We came away from that meeting and we asked ourselves, "How well are we caring for seniors in America?" And the overwhelming answer we had as a leadership team was "Not well enough." We should be doing a better job of caring for seniors. So we set about to transform the way America cares for seniors. And when we stepped away from that meeting, we realized, well, what are we at Bickford Senior Living going to do to transform the way we care for seniors in this country? Right?

We have 55 communities in eight states. We're not really transforming anything. So we approached Tim Donnelly, who was the CEO of SeniorVu, which was a contact center that we utilized for leads. We knew Tim was a very purpose-driven individual, and we talked about our vision and he was all in. So we at that time, created Serviam. Serviam is Latin for "I will serve". Our purpose was to transform the way we care for seniors. The other thing we initially did was we adopted the African proverb, "If you want to go fast, go alone. If you want to go far, go together." So we enlisted other relationships that we've had over the years and asked them to join Serviam Care Network, which is a group of operators that share the same vision that we have with the desire and the need to speak into our industry, change our industry, and create again, that opportunity for us to transform how we care for seniors. That's gotten a lot of momentum in the last couple years. Today our care network is represented by 35 operators across the country, approximately 900 plus communities that they operate servicing 80 to 85,000 seniors across the country. And again, they provide a lot of thought leadership. They participate in some of the different verticals and offerings that we have, but really is about a movement and creating momentum to change our industry for the better as it relates to the way we care for seniors.

Scott

Wow. This is really exciting to be talking to you this time, especially relatively new in your role there. Where's the company headquartered? And it sounds like, are you doing work in every state?

Alan

I was a part of the very beginning and doing a lot of work for Serviam kind of behind the scenes, and then in August of this year, made the decision that I was gonna transfer to Serviam full-time. So 99% of my time is spent on Serviam work. I'm still involved with Bickford, still maintained ownership at Bickford, but what I really wanted to do is to be able to give back to this industry that's meant so much for me over the last 35 years. And for me to be able to do that, I felt I needed to make that change because I wasn't going to be able to really, in my mind, live out my purpose of speaking into this industry at Bickford. I needed to do something in a different way and a little bigger platform. And that's why I made the transition to Serviam.

We're based in Kansas City, but obviously through those relationships we are kind of connected coast-to-coast with operators and seniors and creating, again, opportunities for them to create value for them, value for operators. Because at the end of the day, I feel like if we're going to impact this industry at that senior level, the most effective and efficient way to do that is to hold the hand of those that are holding the hand of the seniors, which is the operators so, passionate about finding a way to bring value, both from an economic standpoint, from an operations standpoint, to operators in this space.

Scott

This whole theme of our podcast this year has been on value-based care, the bigger discussion going on. We had Anne Tumlinson from ATI on at the very beginning. We've had Steve Fogg on from Marquis, Tom Coble from Oklahoma, Mark Traylor from Alabama, and each of them brought different views and lenses and perspective to this conversation of value-based care, everything from big skilled member owned ISNP to small independent owner in Tom Coble to Mark Traylor, that statewide network there in Alabama. Say a little bit about Serviam and the network members themselves. Do they run the continuum? Are they skilled? AL, IL?

Alan

It's predominantly focused on what I would call and define as senior housing. So there's not a lot of skilled communities that are a part of our network, but there are some, but the vast majority are gonna be AL, memory care, standalone properties. We do have a fair number of independent living communities in the network, and we also have a fairly large number of CCRCs that are a part of our network as well. So it's really a broad rush of lots of different product types, but by and large, the majority are what I would again call senior housing and not focused on the skilled space.

Scott

Maybe for our listeners, say a little bit more about the opportunity for a senior housing operator where it's AL or independent living. How do they participate in the network and what's the benefit that they receive in return?

Alan

At the end of the day, what I ask of our operators is to just sign a network pledge that they're going to participate in our movement, they're going to be an active participant in the calls that we have. We have calls every six weeks really about bringing and providing thought leadership to us to help us identify where are the areas of opportunity and what should we be doing at Serviam in the advancement and betterment of this industry, and how can we transform how we care for seniors. Now, I'm not asking for membership dues or anything like that. I just want us to be part of an industry that finds a way to work together. And I think that is probably one of what I've seen and what I've observed is one of the best things that's come out of Covid is much more of a willingness of operators to join together, to partner together, to work together. Because I think what covid taught us is like, you know, this is much bigger than just one individual operator. This is an industry and we all should be working together collectively to provide and bring the best possible care we can to our residents.

Scott

Going there together, right? So say a little more, maybe as we drill down as a network participant, are they entering into a shared savings model? Are they taking on any kind of risk partial or full, or is it across the spectrum depending on the market and the operator?

Alan

We're doing a couple of different things. We've got a lot of different verticals that we offer and that we provide for operators. I'm very passionate about how do we bring value to operators. So one way we've been able to do that is through pharmacy relationship. We've owned our own pharmacy at Bickford for a number of years. I've seen the value in that as it relates to the service we offer to our residents and the customer satisfaction for residents and families and our own staff. So we wanted to be able to create that same opportunity for other operators so we have an opportunity for them to participate in pharmacy and maintain a large percentage of equity in that pharmacy and we will operate the pharmacy on their behalf. We've done something very similar with diagnostics. We've created Serviam Diagnostics with an operating partner that's based in Chicago, that 10 operators have joined us in that they have an equity stake in that diagnostics lab. And it's a full service diagnostic lab that provides blood and molecular testing.

Doing similar work in the hospice space with an opportunity to provide, again, an economic opportunity and a service opportunity to bring best-in-class service offerings for operators and their residents. So that's an opportunity area for operators to participate in. But specifically as it relates to value-based care, what we wanted to do is create opportunities for individual communities, small operators, to participate in value-based care in a meaningful way. Speaking from, with my Bickford hat on, I don't have access to a lot of capital in this day and age to be able to opt in and buy into a special needs plan or become an owner of a special needs plan. But I do want the opportunity to be able to access what I think is a great system of the future as it relates to value-based care.

So our approach is we are creating alliances in specific states where we have a relationship with the payers as the alliance. So I have a relationship with a primary care practice group, I have a relationship with the special needs plan, and then through that relationship I get access to Medicare and Medicare risk, shared savings on the ACO side. But then as an alliance, I will go and get individual relationships with individual communities that can join the alliance. I will provide them with technology from a care coordination standpoint, to do care coordination, really, really well. Create data, be able to have that data platform and that score card that you're looking at every single week through the care coordination. And then through those individual alliance relationships, we create scale and density. So by participation in the alliance, you get access to technology from an upside, but I'm insulating you as an individual operator from that downside risk because I, as the alliance and taking on that downside risk on behalf of that community, for all of the dollars that flow into the alliance, 50% of those dollars are going right back out into the community.

So I'm giving access to Medicare, I'm giving access to Medicare risk or individual communities without the downside, but I'm also giving them access to technology, access to relationships that are ultimately going to improve the overall health and wellbeing of their residents.

Scott

That's a great summary of how you're really adding value and improving the lives of seniors in all directions down through the network. And what I love about this conversation is, I think for so long people hear value-based care and they think, oh, that's just for big-skilled, that's just for a company that actually can do what you were talking about before, which is, create an ISNP, which is an insurance company. I have a background, I started my career in actually forming emerging insurance companies. I have a good sense of what that costs and what's involved in it. And for people who can do it, great, but for assisted living operators, for independent living, for memory care operators, I think what I love about this conversation is there's an opportunity for everyone somewhere to participate either through a smaller network or through through a group like yours. And so my hope is that there are listeners out there that hear what you're saying, been passionate about the industry as long as you have to and want to improve care, want to get into what you call WellCare, right? Think to reach out to you and think, gosh,I can do this. Say about independent living. I've heard you talk about the role for independent living and a value-based care experience. How does that work exactly and what's the specific opportunity for an IL operator?

Alan

People don't really talk about it, but I think there's as much or maybe even more opportunity in independent living because if you think about it, then you get the ability to make an impact much earlier in that individual resident's stage of life than you do in the assisted living world that we're living in today with the rising of acuity and the average age of move-ins, like at Bickford we're at 85 plus, right? But from an independent living standpoint, if you're going to impact the overall health and wellbeing of an individual, the earlier you can get into that game, the better. So you have an opportunity to, what I talk about is helping people live happier, healthier, longer. You have a much better opportunity to do that in the independent living space than you do in the assisted living space because you're getting in relationship with them earlier in the game.

You mentioned special needs plans and ISNPs and I read about some of these benefits, right? That Medicare Advantage plans are offering to seniors and to individuals. And that to me is like a testimony for the need for more adoption of special needs plans in our space because those Medicare advantage plans are written for people and individuals living in their homes and they were talking benefits, like hiking boots and pickleball rackets and tennis racks and those sorts of things. And you have a Medicare advantage plan that provides those sorts of services and then you move into senior living. Those are benefits that you don't need, that they're not groceries, right? Those sorts of things. You don't need those sorts of benefits. The benefits that you need in senior living communities are much, much different. Which is why I think you're gonna see an increase in the prevalence of special needs plans in our space because they're written for individuals that are living with us. They're not written for individuals living in their homes.

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Scott

Meeting someone at an earlier point in their healthcare needs, then you hope that the benefits would go up and downstream and they're all the right direction, both that individual and future payers.

Alan

In providing that proactive care versus the reactive care. That's the thing that I've learned at Bickford is I was guilty of living in this reactive sick care system, right? An individual would move in, I'd wait for something bad to happen, I'd bring all this care and services to that individual and I'd pat myself on the back. What an awesome job I've done by taking care of this person when the reality is, what if I'd have been more proactive in the first place and prevented or delayed some of those events from happening and I wouldn't have needed to bring that care and service to the resident. That's what care coordination, that's what reducing silos, getting out of this fragmented, disconnected sick care system that we're living in today. That's what I think this move to value-based care gives us as operators the opportunity to do. And at the same time, you get paid for doing it.

Scott

I heard you say in other podcasts too, you're a big believer in data and the power of data. Say a little about the data you've been able to amass and to manage through your network.

Alan

The consistency of the data and being able to consistently look at and understand and know how we view a fall. When you look at things like length of stay, even something as simple as a move in, hospitalization, all those things are being done consistently across the network. So we have consistency in data and we're looking at that data through a scorecard every single week across all members of the alliance. I have a really good window and understanding of what that data is, what it looks like. And then my ultimate goal with that data is to be very transparent with that data across the network members and to be able to publish that data. So a potential move in can look at that data and make decisions of where they wanna live based off of that data versus who's got the best bistro, who's got the biggest room because they should be making decisions based off quality and what's going to happen with their loved one, not a rate or a size of an apartment. So I wanna be transparent with that data, publish that data, make it known so the consumer has access to that data. Because ultimately that's the individual who needs that data.

Scott

That's one of the most significant benefits of being a network participant also, right? Is being able to access that kind of aggregated data across many markets to make yourself a better operator themselves in addition to the consumer.

Alan

When I think about it too, and I've had some operators that have said, well wait a minute, if I'm in this alliance, right, and the community across the street's in the alliance as well, and the data's out there and available and they're better than me, then I'm at a competitive disadvantage. Well, so be it. Because ultimately who benefits is the resident, and then you need to up your game and you need to do a better job, get better quality and start performing better because everyone wins in that situation. And ultimately the biggest winner is the resident, which is what we should all be about in the first place.

Scott

Probably a selling point for being a network of participants would be, look, all boats are rising and that's a good thing for everybody, including the residents. And you, even though you may be across the street from a competitor, especially with the demographics coming, that we're gonna really need high-quality operators in all directions here. So in terms of that shared savings model, that doesn't return on day one, right? There are immediate benefits and access to better, more aggregated data, probably connections and network experience as well. But in terms of the shared savings side, there's a little delay there understandably. Is there a timeframe for that?

Alan

First and foremost what I'm doing is I'm gonna measure and look at that outcome data for the first probably year before I move into any sort of risk situations. And then maybe it's partial risk initially, then maybe full risk. And then during that time, again, some of those dollar flows as it relates to the shared savings or care coordination fees, they're coming into the alliance, not the operator, but to offset that loss in revenue. Even it's not significant when you talk about shared savings and care coordination fees as a whole. What I'm doing is, you know, I'm not charging for the technology of care coordination. I have a full-time person living in Virginia that's gonna provide hands-on support for these communities and I'm gonna help offset their technology cost for outcome-focused technologies that are going to help with hospitalizations, ER visits. So I'm willing to pay for part of that technology that they're gonna be utilized to create these outcomes because the flow of dollars is coming into the alliance initially, not the communities. So the alliance is gonna help pay for some of that technology to create the outcomes that's gonna benefit all of us.

Scott

I'm glad we walked down that path and because I wanna give people some expectations and thoughts. Because I imagine there are a lot of people out there thinking about how can I access a value-based care relationship. And I think you've created an incredible model for operators of all sizes. Serviam's next 12 months. Are you looking to, to grow the network looking for new operators who may be listening or we can connect you with?

Alan

Specifically as it relates to the value-based care, the alliance. So we've launched that in Virginia. We have three other states that are right behind that, those being Florida, Illinois, and Michigan. And then we continue to explore other opportunities. So those are the first four states where we will go out and launch the alliance. So if you have a community or two or three or ten in those states, I think it would be a great opportunity again for you to be able to participate in a meaningful way in value-based care and not having to put up capital at the end of the day. And we will help you participate in value-based care. So that's first and foremost. We are also exploring what it might look like for us as Serviam to sponsor our own special needs plan and creating that as well. Because I think, again, who better to understand the benefits and the needs of a senior in a senior living community than us as operators? So what I'm looking to explore is what can a special needs plan look like when I involve and include other operators? Let's create one that's really unique and meets the needs of a senior versus meeting the needs of some big Medicare advantage plan, so to speak, an organization.

Scott

It'll be exciting 12 months from now, I'd love to have you back on a year or so from now, just to hear about your growth and opportunity. Because I know that there's an incredible benefit out there, not only to the residents you serve now, but in the future and for future network participants.

Maybe Alan, say a little bit about as we close, your crystal ball. This discussion of value-based care is just, it's top mind to a lot of people right now. And where do you think we go in 15 or so years? What does the world look like in terms of value-based care, do you think?

Alan

My belief is that it's the best opportunity that's come around in our industry for years. And the reason I say that is because I think we have an opportunity to get paid for the work that we're doing that we're already doing, get access to the other side of the pocketbook, so to speak, right? Ultimately, when I think about the opportunity for value-based care, and nobody really talks a lot about this, I believe it gives us an opportunity to meaningfully meet the needs of the middle market because we as operators are getting access to a different revenue stream that can impact rates and what we charge. Also, I think we can create some unique opportunities with the way we set up special needs plans that maybe can help offset some of those costs as well from an operator standpoint or from a resident standpoint.

So I believe also that there's an opportunity for us to be able to, again, help meet the needs of the middle market in value-based care. I think also what you're gonna see, and that you don't hear a lot of people talking about is, I think value-based care in the Medicaid space and in the Medicaid world is gonna begin to take hold. And I think states are going to recognize that and see that there's some real opportunities from a savings perspective at the state level when you think about value-based care and the opportunity that that presents. So I believe that it isn't going anywhere. Value-based care is here, and that's what I tell operators. Look, at the end of the day, CMS has drawn a line in the sand in 2030, every senior's gonna be in value-based care, and we can either sit around and look at each other and say, oh, I wonder what's gonna happen here, or we can lean in today and be a part of figuring this out together to make it as meaningful as we possibly can for the industry because it's here, it's going to be here, it's going to continue to grow and it's not going anywhere. So let's find a way to most meaningfully utilize value-based care, again, that can ultimately impact resident and overall health and wellness of our residents.

Scott

This has been a tremendous opportunity to talk with you today. I think for our listeners, again, you have a sense of why we're so excited to have you on, you bring such a new perspective to value-based care from our past participants and podcast guests. And I'm really excited to see where we're going. Love to have you on in about a year and see how things are going.

I like to ask our guests just one final question, what's on your nightstand right now? The book you're reading or one you recommend to your colleagues or friends and family?

Alan

I'll give you two. So the business book that's on my nightstand right now is I've read it in the past, but I'm rereading it is Traction by Gino Wickman. We operate in a EOS world, both at Serviam and at Bickford entrepreneurial operating system. So we operate that it's really been meaningful about getting everybody in sync throughout the entire organization as it relates to goals, objectives, and what they call rocks in the US world. So I'm rereading that, so I have that on my nightstand. And then from a personal standpoint, one that I always keep is a book called The Untethered Soul by Michael Singer. And it's really a spiritual book that's about being in relationship with yourself and I have that on my nightstand as well.

Scott

Both books I imagine for our listeners, incredibly enriching for different directions. But that Untethered Soul book, I have, I've not read yet, but I listened to a podcast about the importance of surrender. Maybe that's what value-based care is all about, right? It's let's control the things we know we can focus on and control and move the needle on healthcare and improve seniors lives. So Alan, I can't take you enough for being on our podcast. Look forward to having on as a future guest. For our listeners, thank you for tuning in today. This is VERSED.