Results mixed for other counties that sold nursing homes
As York County Commissioners consider selling the Pleasant Acres Nursing and Rehabilitation Center, they can look for guidance from plenty of other Pennsylvania counties that have recently sold their nursing homes.
A York Dispatch review of state Department of Health records and local news reports from across the state found that at least 18 counties have sold their nursing homes, primarily to for-profit companies, since 2005.
York County is one of 18 counties that still owns their own nursing homes, according to the review.
Kelly Andrisano, executive director of Pennsylvania Coalition of Affiliated Healthcare and Living Communities (PACAH), said counties are consistently moving toward privatizing their nursing homes, most frequently citing funding issues as the reason.
She pointed to flat Medicaid reimbursement rates, and said she expects county-owned facilities to continue to struggle unless federal and state funding increases. She noted Berks County also is considering selling its nursing home.
Selling Pleasant Acres, which taxpayers have subsidized to the tune of about $75 million during the past 10 years, has been discussed for many years because of its rising costs.
The county has contracted the assistance of Susquehanna Group Advisors to solicit bids for Pleasant Acres, though commissioners insist they haven't made a final determination to sell the 375-bed facility.
Andrisano said she has seen counties reverse course after expressing an interest in selling their nursing homes because of constituent feedback, though it's rare and she couldn't recall any specific example.
York County administrator Mark Derr said he's been told 15 companies have expressed some form of interest in the nursing home, and final bid submissions are due March 15.
Jay Wenger, managing director of Susquehanna Group Advisors — which has helped several other counties sell their nursing homes — has said the goal will be to increase, or at least maintain, the quality of care Pleasant Acres' residents currently receive.
Ratings: The Centers for Medicare and Medicaid Services rate nursing homes on a scale of 1-5 stars based on a variety of factors, including inspections, staffing and quality care measures.
A Dispatch review of the nursing homes sold by counties since 2005 found an average overall rating of 1.9 stars among the 15 facilities (two nursing homes sold in 2017 haven't been rated since the sale, and one was demolished).
The 21 nursing homes still owned by a county (Allegheny County owns four regional centers) carried an average overall rating of 3.1 stars.
Pleasant Acres is one of three county-owned facilities with a 1-star rating, with CMS noting nine health citations during its most recent inspection.
Andrisano, whose organization represents county-owned and private nursing facilities, said the quality of care really differs on a case-by-case basis, but county-owned homes do have an extra layer of oversight in place because the owners must answer to their constituents.
She said county-owned homes also provide a safety net, typically accepting a very high percentage of Medicaid participants, and there is a concern for what will happen to low-income senior citizens if the privatization trend continues.
Wenger has said that any contract to purchase Pleasant Acres would include a stipulation that the buyer must maintain a high percentage of Medicaid residents.
Numerous homes sold by counties in recent years have since been resold to other companies — likely nullifying certain agreements the original purchaser made with the county — but Wenger said the reality is these companies must continue to operate with a high Medicaid population.
"Companies would be foolish to think they could significantly alter the type of resident ... in these (county-owned) facilities," he said. "There's just not a market for private pay in standalone facilities."
Lebanon strike: Wenger added that finding a stable owner-operator is a priority, and his company will scrutinize bidders' pasts to see what they've done when purchasing similar facilities.
One company Wenger said he will not consider is Complete Healthcare Resources (CHR), which is at the center of a controversy surrounding the former county-owned nursing home in Lebanon County.
The county's commissioners sold Cedar Haven Healthcare Center to CHR in 2014 for $25.5 million, but CHR's primary financial backer forced them out as operators of the facility within months of the purchase, according to reports from the Lebanon Daily News.
Cedar Haven's union employees have since gone on strike for more than four months because of labor contract disputes, and family members of residents attended a recent county commissioners meeting to complain about quality-of-care issues.
Wenger, who said he assisted Lebanon County with that sale, said CHR lied to his company, refusing to disclose who its financial backers were, which is why he wouldn't recommend York County consider selling to them.
The actual quality of care Cedar Haven residents are receiving is in dispute.
CMS has given the facility a 5-star rating, and Chas Blalock, managing partner of the company now operating the facility, wrote in a letter to county commissioners that numerous union employees either were never on strike or have since returned to work.
Steve Mullen, director of the American Federation of State, County and Municipal Employees (AFSCME) district representing Cedar Haven employees, said Blalock has cut employee benefits and refused to bargain with the union in recent months.
Mullen, who said his union members at the former county-owned home in Schuylkill County haven't had any issues, advised York County commissioners not to sell Pleasant Acres, but if they do, make sure they closely vet any potential buyers.
Exploring options: After more than 100 residents voiced their opposition to selling the nursing home during the county's first public town hall on the subject, President Commissioner Susan Byrnes said the board is exploring other avenues to keep the facility under county control.
Employees are looking for ways to reduce expenses, commissioners are meeting with state representatives in search of more funding support, and a discussion has started to consider opening a wing specifically for veterans to increase income, Byrnes said.
Pleasant Acres unveiled a new rehab gym on Tuesday, Feb. 20, and Byrnes said the state Department of Health has told the county it has vastly improved in rehabilitating its nursing home residents.
The county also is in contact with the other counties still operating nursing homes to try to pick up tips, she said.
Allegheny County, which owns four regional nursing centers totaling nearly 1,200 beds, is operating its facilities at about a break-even rate, according to county executive Rich Fitzgerald.
Fitzgerald said the county's "robust health care ecosystem" and their centers' specialized services have kept revenues in line with costs.
He acknowledged that if the nursing homes were operating with deficits similar to York County, county officials would have to consider selling.
Cambria County sold its nursing home to for-profit Grane Healthcare in 2010 for $14.3 million.
Veil Griffith, the county's administrator of the Area Agency on Aging, said there have been pros and cons of privatizing the facility, but it was certainly in the best interest of the county's finances.
"Counties just should not be in the nursing home business," she said.
Grane renovated the facility and offers more services, so Griffith said she doesn't see any negative for the seniors living there, though she acknowledged the employees likely faced some difficult changes.
Wenger has said most private companies keep a majority of employees when they purchase county-owned nursing homes.
York County is scheduled to hold two more public town hall meetings about the potential sale at 6:30 p.m. on March 7 and March 27 at Central York High School, 601 Mundis Mill Road in Springettsbury Township.
— Correction: An earlier version of this article incorrectly stated the number of health citations issued during Pleasant Acres' most recent inspection. The correct number is nine.
— Reach David Weissman at email@example.com or on Twitter at @DispatchDavid.