A California hospital that had planned to close its deficit-mired skilled care unit is, instead, outsourcing the operation to nursing home giant Ensign Group.
The Sonoma Valley Hospital has struggled in recent years to maintain the service, which has lost about $800,000 annually. It appointed a task force last year to figure out the issue, and has now opted to bring in the Mission Viejo, CA-based operator, hoping it can right the ship.
“Ensign brings capabilities in post-acute care that we do not possess, including broad expertise operating facilities under ever-changing regulations and significant efficiencies of scale,” Joshua Rymer, board chairman of the Sonoma Valley Healthcare District, told the Index-Tribune. He added that Ensign plans to add a sub-acute unit to bring in additional patients, with such options scarce in the North Bay area.
Under the draft proposal, Ensign would assume operations of the skilled nursing unit on July 1. Sonoma Valley Hospital will receive funds from the operator as part of a revenue-sharing agreement. The medical center will in turn provide certain higher-acuity services to nursing unit patients. This is expected to generate incremental revenues for the hospital while at the same time, SVH will not be held liable for any losses incurred by its partner. The facility will remain under the hospital’s license and oversight.
Ensign has grown rapidly in recent months and is one of the largest nursing home chains in the country. Its portfolio includes 197 SNFs and 56 standalone senior living facilities. It also owns 26 hospice agencies and 25 home health operators, which it spun off into a second company called Pennant Group earlier this month.
Other larger providers such as Kaiser Permanente and St. Joseph’s Medical Center also contract with Ensign. Sonoma Valley Hospital hopes that those ties will help its new partner to recruit more patients to the unit, building a more sustainable operation. Hospital officials said Ensign also can support longer patient stays. The current average is about 17 days.