A New Option for Critical
Access Hospitals with
Attached Nursing Homes
Overview
 How and why this venture started
 Formulation of a work plan for moving forward
 Grant award and change in participants in the project
 Where we are today
 Purpose of the Grant
 Question and Answers
Do what is right, what moves our
mission forward, and what—because
of its ambition, courage and
potential—is really worth the
disruption.
Frederick Douglass
Nursing Homes are Struggling
 Number of CAH’s with attached nursing homes in MN
 Years ago there were 45 CAHs with attached SNFs
 Now 30-35 and decreasing.
 Decrease of CAH attached SNFs is due to sales, other
ownership structures, and other ways of separating the
SNF from the CAH structure
 The number is likely to become lower.
 Number of nursing homes closed in MN
 Since 2000 – 55
 Since 2003 – 33
In the beginning…
 In early Summer 2008, in response to the operating
losses suffered by 4 Northeastern MN hospitals (3
of which are CAH’s with attached nursing homes),
the administrators started meeting to discuss
options.
 Ely, John Fossum
 Cook, Al Vogt
 Virginia, Keith Harvey
 White, Jim Carroll (I came aboard in August, 2008)
 In Fall 2008, the group of administrators met with
legislators to discuss options.
In the beginning…
 A discussion ensued relating to the option of
combining the 4 nursing homes into a single
operating entity.
 Taking a regional approach to providing services for
our aging population
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Nursing home services
Assisted Living Facilities
Housing with services
Other options
 Reduce the impact of the SNF allocations on the cost
report
In the beginning…
 The feasibility study was funded by a grant
obtained through the IRR.
 McGladrey’s feasibility study showed that by
combining the nursing homes, we would decrease
the total losses by millions of dollars through
economies of scale (i.e. administration costs,
coverage, etc.).
 The feasibility study showed us the idea had merit.
Formulating the Work Plan
 Core concept: separation of the nursing homes from
the Critical Access Hospital structures because of
the ―double whammy‖ of having them integrated
structures while preserving the existence of the
community nursing home; movement of the nursing
homes into a single organizational structure
 What is the ―mission‖ of our venture: provide skilled
nursing home services to the residents of the
markets that we serve in their home communities
through coming together to maximize efficiencies in
operations and collaboration in quality of care
Formulating the Work Plan
 Identification of the barriers to carrying out the
mission and discussion of strategies to overcome the
barriers
 Barriers included:
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Community reluctance
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Need for preservation of jobs in communities
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Differences in ownership structures, e.g., private non-profit,
public
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Cultural differences in the workplaces
Formulating the Work Plan
 Barriers continued:
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Community reluctance
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Need for preservation of jobs in communities
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Differences in ownership structures, e.g., private non-profit,
public
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Community foundations
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Hospital districts and tax levies
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Health information technology platforms
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Complexities related to property ownership/covenants, etc.
Formulating the Work Plan
 Barriers continued:
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Bond covenants
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How to dissolve or move out of the relationship if necessary
 Tasks, completion dates, and responsibilities
defined
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Started with a dose of reality: how many nursing home beds
do we need in our communities to provide necessary care
taking into account use of swing beds
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Operations plan and financial analysis – is there enough to
be gained to move forward with this difficult venture
Formulating the Work Plan
 Tasks, etc. continued
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Decision about applying for the grant
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Meeting with key legislators to ensure support
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Meeting with key union leaders to inform them of effort and
solicit feedback and ideas, gauge opposition
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Keeping the community and employees informed
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Obtaining Board support
Formulating the Work Plan
 Tasks, etc. continued
 Individual meetings with the Boards of potentially
participating organizations to update and ensure that
they were committed enough to exploration of the plan
to sign MOU to participate
 Development of framework for the grant – how does
our project focused on nursing homes link with a grant
for innovation in community services
 Expansion of our thinking to be central players in ―care
managing‖ for older residents in our communities –
making the nursing home ―the hub‖ of senior services
Formulating the Work Plan
 Tasks, etc. continued
 Writing the Grant – we will spare you the agony
 The Grant clearly called for careful planning and
connections with key players in the community
including AAA and St. Louis County to be acceptable
and successful
 If we had not had the initial grant for the planning, we
may not have been successful
Evolution
 In Spring 2009, we learned that we were selected as
a recipient of one of the two grants awarded.
 During that time Ely determined it was in their best
interest to pursue a different course.
 Some time later, Cook determined they would not be
participating in the grant project.
 We began looking for additional partners
 Pine Medical agreed to participate
 St. Michael's and St. Rafael’s agreed to participate
 Current members of the consortium are:
Current Consortium Members
 White Community Hospital and Skilled Nursing
Facility in Aurora, MN
 St. Rafael’s Health and Rehabilitation Center in
Eveleth, MN
 St. Michael’s Health and Rehabilitation Center in
Virginia, MN
 Virginia Regional Convalescent Center inVirginia,
MN
 Pine Medical Center Nursing Home in Sandstone,
MN
Where we are Today
 White Community Hospital and Pine Medical Center
are both Critical Access Hospital’s with attached
nursing homes participating in the grant project.
 White Community Hospital suffered nursing home
operating losses in 2009 of about $750,000 in 2008
$950,000 and in 2007 $1,100,000.
 In 2009 White Community Hospital put 14 beds on
layaway which reduced its deficit by over $250,000.
 White Community Hospital has been operating at 55
beds, with census generally at 53-54.
Where we are Today
 Most nursing homes attached to a Critical Access
Hospital are facing some of the following issues:
 Inability to upgrade facility to meet current culture
needs and initiatives
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Nutritional services changes
Home environment changes
Private room initiative
Household model changes
 Inability to maintain current building needs
 HVAC
 Roof
Where we are Today
 Inability to offer the right services for the right
population
 Behavioral health
 Assisted living
 Memory care
 Senior Housing with Services
 Home Care
 Hospice services
Scope of Project
 Began the process in Spring 2008
 Applied for and was awarded the IRR grant for the
feasibility study Fall 2008
 Applied for the Minnesota Department of Human
Services Three-Year Demonstration Projects for
Older Adult Services
 Grant awarded and group began working on
implementation plans
 Grand Contract signed in May 2010
 Two years in the making to get us to this point
The Purposes of the Grant
 Grant Contract Signed on May 2010 has two main
components: organizational redesign and direct
community service.
 Organizational redesign with the goals of realizing
economies of scale and improving and maintaining
quality and services
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Operating Entity
Governance Structure
Assets
Employees
Ancillary services (laundry, housekeeping, maintenance, etc.)
The Purposes of the Grant
 Health Care Navigator is to provide case management
and support in the community to maximize the ability
of aging community members to age in place.
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What will the program look like
Who will create and implement it
Who will be served by the project
How will the project be measured
How can we identify gaps in community based services
How can those gaps be filled
How can the facilities, the community based service providers
and the health care providers work with the Health Care
Navigators
Moving Forward
 Organizational Redesign:
 Advisory Committee created
 Board of Directors in place
 Affiliation Agreement has been drafted and is being
reviewed
 Articles of Incorporation for new 501(c)(3) are drafted
and being reviewed for approval
 Bylaws are drafted and being reviewed for approval
 Documentation relating to operations are being drafted
Moving Forward
 Meetings will be scheduled with representatives of the
employees
 An administrator/CEO will be hired
 Obtain tax identification number, insurance coverage,
etc. for new organization
 Began discussions relating to IT, marketing, finance,
licensure, HR, etc.
Moving Forward
 Direct Community Service project is geared toward
 Looking for a qualified Lead Health Care Navigator
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Grant allows up to 3 FTEs for community Health Care
Navigators
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Includes mileage and cell phones
Consortium members will provide space for Health Care Navigators
Working on partnering with insurers to create a sustainable
program
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Identifying population to be served
Identifying the services to be provided
How will the outcomes be measured
Member Commitment
 Major undertaking
 Large Commitment of resources
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Time of Personnel
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Administrators
Directors of Nursing
Finance
Social Services
Office staff
Travel time
Meetings
Teleconferences
Member Commitment
 The Consortium members are committed to
creating a model in our communities where aging
community members can remain healthier longer
and age in place.
 Although we started the process 2 years ago, our
consortium members are just beginning our journey
together.
 Question?