Concerned about how much money the Cedarbrook nursing home is costing Lehigh County, county commissioners plan to begin the new year by authorizing an independent evaluation of the operation’s future.
At their Jan. 8 meeting, the commissioners are expected to consider approving an $18,000 study of future financial options for Cedarbrook.
It will be done by Complete HealthCare Resources-Eastern, Inc, which is based on Dresher, Montgomery County.
The company, known as CHR, will identify options and make recommendations. Selling the county-owned Cedarbrook will be one of the long-term options assessed; continuing the current operation will be another.
CHR intends to make preliminary recommendations to the county within six to eight weeks of being hired.
On Wednesday night, County Executive Matthew Croslis and County Executive-elect Thomas Muller literally stood together to tell commissioners they want CHR to do the study.
Some commissioners were ready to hire CHR Wednesday night, but a written resolution is needed and a contract must be drawn up.
Croslis told commissioners that on Thursday CHR will provide the county with a list of information it needs to do the evaluation. He also said CHR wants to know what commissioners hope to see addressed in that study.
CHR representatives at the commissioners meeting said their 24-year-old company manages about 18 nursing homes – they called them communities – including three county-owned facilities. It also does consulting, including numerous operational assessments similar to what Lehigh County officials want done at Cedarbrook.
“We would look at all aspects of the operation,” said Todd Wagner, vice president of financial management at CHR.
Cedarbrook has a total of 670 beds at two locations: Fountain Hill and South Whitehall Township. It is run for the county by Harrisburg-based LW Consulting. Dougherty said at one time it was run by CHR.
Thomas Creighton, who chairs the commissioners’ Cedarbrook committee, succinctly summarized the problem with the nursing home: “The issue is that they’re losing money.”
In October, the county had to transfer $3.6 million to Cedarbrook to keep it open through the end of this year.
The county will be contributing much more to Cedarbrook in 2014:
nearly $6.5 million.
Commissioner Percy Dougherty wants the financial “hemorrhaging” to stop. He questioned whether it will just continue year after year if nothing changes.
“Why is it happening?” asked Dougherty.
Commissioners tried to get that question answered by LW Consulting representatives Wednesday night. Some commissioners made it clear they were not satisfied with the answers they were getting.
Dougherty said Cedarbrook should be run like a self-sufficient business, able to operate in the black without annual multi-million-dollar county subsidies.
“Theoretically, all of the Medicaid, Medicare, private pay and everything else should take care of that facility,” said Dougherty.
He said neighboring Monroe County doesn’t have to “put a single penny”
into its nursing home.
Commissioners want Cedarbrook to at least break even each year or, better yet, make a profit. In past years, the nursing home did make money, said Creighton.
“I suspect there will always be a cost,” predicted Muller, the county exec-elect. “We’re not going to get it back to where we were putting in only $1 million. You have to balance that off against what you want to do for the community, as well as what would be there if the home weren’t there.”
But Muller also told commissioners: “We’re going to have to look to change this business model a little bit.’’ He said it can’t remain exactly like it is because, with the current “case mix,” Cedarbrook is not in great financial shape even when 98 percent of its beds are full.
Commissioner David Jones said the nine commissioners have spent a great deal of time asking many questions of the people who run Cedarbrook. He said commissioners have not been happy with some of the answers they have received.
And Jones told L.W. Consulting: “Some of your answer we don’t trust.”
Dougherty also told Cedarbrook’s operators he was not satisfied with the answers he was getting at the meeting.
Confirmed Muller: “There’s clearly a lack of trust to some degree in what you’re hearing.”
Cedarbrook operates with nearly 95 percent of its beds occupied. But with nursing homes, high occupancy does not necessarily mean financial success. Officials indicated the problem is that most of Cedarbrook’s patients have low incomes, so the nursing home gets only Medicaid reimbursements for them. Cedarbrook can get larger government reimbursements for Medicare patients.
Commissioner Vic Mazziotti said many people assume folks reside in nursing homes for a long time, usually until they die. He asked what percent of Cedarbrook’s beds are occupied by people who are there for a long time.
Commissioners were told 90-95 percent of Cedarbrook’s patients fit that category.
But Cedarbrook is working to also market itself as a short-term rehabilitation facility, not just a long-term care nursing home.
Gary Heinrich of LW Consulting told commissioners one way Cedarbrook plans to increase its revenue is by having Medicare patients stay an average of two more days – 34 days rather than 32 --and giving those patients more therapy, because more therapists are joining the staff.
But commissioners were assured LW will do that “only if the care warrants the services – we will never do anything that will compromise our integrity. We have done a very good job of caring for patients.”
Said Commissioner Scott Ott: “We didn’t ask you to come before us because we’re concerned about the quality of care.”
Heinrich said therapy at Cedarbrook sometimes has ended sooner than it should because staffing levels were not where they need to be.
Ott questioned whether that meant people were hustled out the door before they needed to leave, “without delivering the optimal care.”
Dougherty also expressed concern that patients will be getting unnecessary therapy “to drag up the bills and get the reimbursement.”
“Either somebody is not being served now or we’re going to have too much therapy,” said Dougherty.