The high cost of caring for skilled nursing patients is squeezing finances at Upstate New York’s Heritage Ministries after it took in a majority of residents from the closing Lutheran Home and Rehabilitation Center of nearby Jamestown.
Now, low Medicaid reimbursements may force Heritage to shift away from prioritizing long-term care in its portfolio, according to Lisa Haglund, its president and CEO.
While Heritage gained more than 40 residents after Lutheran Jamestown announced its closure in November, the costs of caring for residents on Medicaid only increased the financial burdens on the nonprofit organization’s skilled nursing facilities.
Haglund told the Chautauqua County Legislature that these facilities are losing $130 per Medicaid resident per day.
“You can’t operate a not-for-profit mission without margin and not-for-profits typically tend to understand that and lean into that,” she said. “We have to care about our mission but we can’t always do that day-to-day.”
Agency expenses and hospital backlogs
The costs of staffing — particularly agency care workers — are a contributing factor as well. Jamestown was relying on agency workers, according to Haglund. Those higher costs of labor passed on to Heritage when it hired around 20 staff formerly employed at the closing facility.
Heritage may be forced to lessen its stake in the LTC sector, moving more toward home or outpatient care and assisted living, Haglund told officials. However, she also expressed hesitance to fully withdraw from skilled nursing.
“That doesn’t mean we would get rid of [skilled nursing],” she said. “It just means that instead of having it be 85% of our portfolio, have it move down to 60%.”
Part of Haglund’s reluctance seems to be due to a hospital discharge backlog in New York.
With respiratory illnesses on the rise in winter and increasingly few operating nursing homes left to absorb that demand, those backlogs force some residents to wait weeks or even months for long-term care placement.
Heritage has downsized before to keep operations healthy in other areas, shutting down struggling operations in Illinois and Washington. Upstate New York nursing homes are also far from alone in facing financial pressures from Medicaid imbalances.
“I am requesting collaboration on regulatory changes to ensure the best care possible while solving issues like the national staffing crisis,” Haglund told McKnight’s Thursday. “I am committed to moving Heritage into a sustainable future and to reduce the drain on state funding sources. I also recognize we can’t regulate ourselves into reform. We must intentionally invest into workforce development, creating clinical staffing, investing in high school and college students, and finding ways to provide quality care, while supporting New York state and the counties we serve.”
