By Sam Baker - 09/11/12 09:00 AM EDT
When Mark Parkinson left the governor’s mansion in Kansas, he figured he would go back to a successful business career operating nursing homes.
Instead, he soon found himself representing the entire nursing-home industry on a national stage at a time of unprecedented challenges.
“It gave me an opportunity to be able to have an impact with the entire sector,” Parkinson said of joining AHCA.
Signing up to be one of the industry’s most prominent advocates was a fitting step for Parkinson: He has run a large group of nursing homes. He has managed a state healthcare budget. And his former boss, Kathleen Sebelius, runs the Health and Human Services Department.
“I wouldn’t be back here running any other trade association,” Parkinson told The Hill.
Parkinson joined AHCA in 2010, on the cusp of a dramatic reduction in federal healthcare spending. Extra Medicaid funding in the stimulus would start to disappear, and Republicans were about to win the House on an aggressive campaign to cut federal spending.
Those threats have persisted. Nursing homes avoided a steep cut earlier this summer, as lawmakers backed away from a plan to pay for a student loan bill by cutting Medicaid payments. But now there’s the looming threat of sequestration, and several other cuts — including a big hit from the Affordable Care Act — have already taken effect.
“Nursing homes have just been cut too much, and we really do feel like there is a material part of the membership that is at a crossroads,” Parkinson said. “There’s just a certain number of cuts you can take and still move forward.”
Nursing homes and assisted living have always been important to Parkinson. He said he first became interested in elder care while volunteering with a hospice in the 1980s, providing end-of-life care to patients who are nearing death.
Parkinson was struck by the lack of a healthcare setting somewhere between nursing homes and care provided in patients’ homes. The answer was assisted living, which aims to provide the comfort of home care with the resources of a nursing home.
“I just thought it was one of the best ideas I had ever seen … and I became so enamored with it that I actually left the state Senate” to go into the assisted-living business, Parkinson said. “It immediately crossed my mind that this was a tremendous idea, and this is what had been missing in the hospice work I had been doing.”
Parkinson and his wife began opening assisted-living facilities in Kansas and Missouri. Soon, they had opened 10.
“That has really burned into me a deep belief in the importance of what our members do every day,” he said.
The couple sold their company in April 2006, and Parkinson said he figured he would take a few months off. That plan lasted about two weeks, until Sebelius, at that time governor of Kansas, asked Parkinson to ditch the Republican Party and become her lieutenant governor.
As a Republican, Parkinson had served in the state’s House of Representatives and Senate. He had been chairman of the Kansas Republican Party from 1999 to 2003. Viewed as a centrist when the GOP was moving more and more to the right, Parkinson made the switch.
At the time, Sebelius said she chose Parkinson for his business acumen and ability to work with people on both sides of the aisle. Parkinson said he took the job because Sebelius had shown independent leadership.
He eventually took over as governor once Sebelius was tapped to lead HHS.
“I bring, with that, an understanding of how difficult it is sometimes to work issues through the process,” Parkinson said.
Parkinson said he still keeps in touch with Sebelius now that he, too, has come to Washington.
But he said his industry doesn’t expect — or receive — any preferential treatment.
“She is very focused on creating the best healthcare system possible … I think she treats everybody fairly,” he said of Sebelius.
Indeed, HHS has made some cuts to nursing homes under Sebelius’s leadership that AHCA strongly opposed. Medicare pursued an 11 percent reduction last year to make up for past overpayments, and the Affordable Care Act also took a bite out of nursing homes.
Nursing homes are hardly alone in their fear of even deeper cuts under sequestration. Every healthcare sector is lobbying furiously to prevent the automatic, across-the-board cuts, which are capped at 2 percent of Medicare’s budget.
But the current emphasis on government health spending is especially dangerous for nursing homes, Parkinson said, because hardly any private insurance plans cover nursing-home stays.
“I don’t want to throw any of these other providers under the bus, but they have the benefit of private insurance,” he said. “We live and die by Medicare and Medicaid reimbursement.”
Nursing homes are particularly reliant on Medicaid — which has seen especially large reductions lately as cash-strapped states try to squeeze more and more savings from the program.
“Medicaid reimbursement is horrendous in the country right now,” Parkinson said. “The only thing that keeps the sector going right now is Medicare reimbursement and some small amount of private insurance.”
To make its case at a political level, AHCA launched television ads in eight states last year and is planning a new round of ads soon, mostly in Washington.
As AHCA tries to stave off further cuts, Parkinson says he’s also trying to convince members of Congress that nursing homes are part of the solution to rising healthcare costs — not part of the problem.
Many nursing-home patients are recovering from major procedures. Medicare and Medicaid save money by paying for those patients to recover in a nursing home instead of a hospital, Parkinson argued.
He said nursing homes are also taking a cue from assisted-living facilities and trying to replicate the home, focusing more attention on each individual patient.
Staying in a nursing home “will never be as good as home, but it will be as home-like as possible,” Parkinson said.
Since Medicare began assigning quality ratings three years ago, the number of five-star nursing homes has risen by 34 percent, according to AHCA. Four-star ratings have also jumped, while the number of one-star facilities is falling.
Under Parkinson’s leadership, AHCA started a new division focused on quality. It’s now the second-largest department.
Parkinson believes tracking and improving quality is the best way to ensure that policymakers will value nursing homes and reimburse them accordingly.
“For the sector to thrive, it has to be a high-quality, very efficient alternative,” he said.