Luckily for George V. Hager Jr., chief executive of the Kennett Square company that operates one of the nation's largest chains of nursing homes and rehabilitation centers, his personal New Year's resolutions are modest.
"This coming year I'm hoping to get on a regular exercise routine," said Hager, who turns 61 later in January. "I especially enjoy walking."
One foot in front of the other and he's good, but his aspirations for Genesis HealthCare Inc. might be a little more difficult to achieve. The company operates 60,000 beds in 500 facilities in 34 states, although later this year, Genesis plans to exit five Midwest states.
Genesis' situation isn't much different from the rest of the industry - about 65 percent of the people who live in Genesis' nursing homes are funded by the state through Medicaid. The reimbursement, Hager says, isn't even close to enough to break even.
"The growth in the aging population has created extreme pressure on state budgets so that state medical assistance rates are actually below cost in every state we operate," he said. "Effectively, the challenge in the industry is that 65 percent of the patients we serve, we lose money on."
And for 2017? "I'm hoping we'll get some level of federal funding that is additive to the inadequate Medicaid funding."
How likely is that?
I think it's a challenge. Any additional cost in a budget that is already imbalanced is very difficult, but I do think there would be bipartisan support to offer a benefit for chronic illness, especially something tied to Alzheimer's, which is a disease affecting nearly every family in this country.
What is your Medicaid loss?
Anywhere from 10 to 20 percent, depending on the state. It puts pressure on staffing, on the ability to pay adequate wages, and benefits.
What will be the impact of Trump's administration?
I couldn't begin to predict. Generally speaking, I don't think he'll have much of an impact. I can't see major changes in funding or innovation. He might try to reduce the size of government and I don't know if that will reduce some of the oversight in administrative complexity that seems to [make] it more expensive and difficult to operate. I'm hoping health care is not a partisan issue.
Is tort reform on your 2017 wish list?
Malpractice is a very significant problem in health care in this country. We pay more in medical malpractice defense in claims than we do in feeding more than 50,000 residents on a daily basis three meals a day. Our losses in defense costs are over $100 million a year. In many jurisdictions, you are almost forced to settle because there are no limits on what a jury could award and you have some very anti-corporate, anti-for-profit jurisdictions.
Where do Pennsylvania and New Jersey fit in?
Very bad for our industry.
When you visit a Genesis facility, is there any way you can size up how it's doing quickly?
Obviously, the physical appearance you look at, and smells and odors, but really, it is the relationship of the leadership to the staff that is pretty obvious, pretty quick.
When I tour, really good center nurse executives and center executive directors - every person they run into and they grab them and say - 'Meet George Hager. This is Irene. She's been here 18 years.' They know everyone; everyone knows them. The employees are not afraid to come up to them. You can tell there's a great relationship.
Do good relationships show up in your statistics?
Without a doubt - employee satisfaction, employee engagement, staff retention. That environment is infectious and the community knows what's going on in that center, so occupancy levels are higher. All the clinical metrics seem to be better. If your clinical metrics are good, your employee metrics are good, then, typically, customer satisfaction is high and the financials always seem to take care of themselves.
What scares you most about aging?
Losing my ability to be physically active. If I've developed Alzheimer's, I won't know that I can't be active. I'm much more afraid of being unable to enjoy life.
Interview questions and answers have been edited for space.