Nursing home closing may reflect state revenue challenges

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Golden Living Center in Marion was one of two quality-care nursing homes closed this month by the same parent company.

The recent decision by a national nursing home chain to close two of its facilities in Kansas has highlighted the challenge of many nursing homes to generate adequate revenue through traditional means.

Golden Living Centers closed its 42-bed home in Lucas and its 72-bed home in Marion earlier this month.

?Golden Living made the difficult decision to close these LivingCenters only after careful review and consideration,? the corporation?s spokeswoman, Barbara Ware, wrote in an e-mail response to a KHI News Service request for comment.

?The decision was based on a number of factors and had nothing to do with the excellent care provided by our employees at those facilities.?

Golden Living Centers, formerly known as Beverly Health?care, continues to operate 16 nursing homes in Kansas.

Both the Marion and Lucas nursing homes were in good standing with the Kansas Department on Aging.

?Neither of them has a history of deficiencies?there have been a few, but they?ve been relatively minor,? said KDOA spokeswoman Barb Conant. ?They?re not what you?d call troubled homes.?

Kansas Advocates for Better Care named the Lucas facility one on the state?s best nursing homes in 2007.

Marion has a second nursing home, St. Luke Living Center, which is part of the local hospital. It?s now full.

Lucas is without a nursing home.

Though Golden Living Centers officials declined to explain the closings, earlier news reports indicated both homes were half-empty.

It?s likely that many of the residents? stays were funded by Medicaid. According to KDOA records, 53 percent of the state?s 17,800 nursing home residents are on Medicaid.

For a half-empty nursing home with half its residents on Medicaid, turning a profit would be difficult.

Golden Living Centers is one of the nation?s largest for-profit nursing home chains.

A recent survey commissioned by the American Health Care Association found that Medicaid payments to Kansas nursing homes were among the lowest in the nation.

Only six states?Texas, Illinois, Iowa, Missouri, South Dakota and Oklahoma?paid their nursing homes less.

Industry surveys show Kansas nursing homes losing about $10 a day on each of their Medicaid residents.

Generally, nursing homes offset their Medicaid losses by increasing their private-pay billings and by providing short-term services covered by Medicare, which pays more that Medicaid.

?You know there?s a problem when good homes with good employees and quality surveys?both of these homes fit that category?lack the financial means to stay in business,? said Cindy Luxem, president and CEO at the Kansas Health Care Associa?tion.

The association represents the interests of the state?s for-profit nursing homes.

Luxem has long argued that without an increase in the state?s Medicaid payments, many nursing homes, especially those in small towns, will be forced out of business.

Whether the Lucas and Marion closings signal the beginning of such a trend remains to be seen.

Nursing-home finances, too, have been set back by state policies that encourage services that help frail seniors live in their own homes, avoiding or delaying moves to nursing homes.

?We?re supportive of any and all services that help people stay in their homes and in their communities, and we, as a state, need to do whatever we can to see that these services are vibrant and available in our rural areas as well as in our urban areas,? Luxem said.

?What I fear happening is that people don?t see long-term care as part of that continuum because, as we all know, no one wants to move to a nursing home,? she said. ?Then, five or six years down the road, we get to a point where those services need to be there and guess what? They?re there, but they?re 60 miles away. You have to get in your car and go to Wichita.?

Mitzi McFatrich, executive director for Kansas Advocates for Better Care, declined to predict whether more small-town nursing homes will close.

?I don?t know the answer, but I think there are going to be some significant changes in what long-term care is going to look like in the coming decades,? she said.

?Part of what we?re seeing, I think, is that the services the consumer wants and needs aren?t always the services the government pays for. That?s going to change.?

For a nursing home to remain in business, it will have to adjust its services to fit what would-be residents and their families want, she said.

?I can assure you that residents and their families really, really shop for what?s best for them,? said Lu Janzen, administrator at Parkside Homes, a nonprofit senior living community in Hillsboro.

?The traditional nursing home is going to have trouble,? Janzen said. ?We have to diversify, to take our services outside our walls.?

Several former Golden Living Center/Marion residents now live at Parkside Homes.

Dave Ranney, former managing editor of the Hillsboro Star-Journal, is a staff writer for KHI News Service, which specializes in coverage of health issues facing Kansans. He can be reached at dranney@khi.org or at 785-233-5443, ext. 128.

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