Sanilac County News

Commissioners consider future of Medical Care Facility

MCF struggles with low census, reduced revenues

County Commissioners are exploring options for the Sanilac County Medical Care Facility, which has reduced revenues and patients.

County Commissioners are exploring options for the Sanilac County Medical Care Facility, which has reduced revenues and patients.

The Sanilac County Board of Commissioners met with representatives from Health Dimensions Group (HDG) to discuss the current state of the Sanilac County Medical Care Facility (MCF) and give recommendations for their next steps.

HDG is a consulting firm from Minnesota. Currently, they work as consultants with a variety of health care facilities throughout the United States. They also manage 36 senior living and health care facilities in seven different states.

The county commissioners have been working with HDG since December 2021 to review the MCF’S operations and provided recommendations for improvement.

Last October, commissioners met with the MCF board to discuss labor shortage issues and to pursue an application for an Employee Retention Tax Credit. The MCF did apply for the tax credit, though, as of last week, they are still waiting on those funds to come in.

HDG completed a full assessment of the MCF’s operations, including assessing the financial and operational status of the facility.

Brian Ellsworth, vice president of public policy and payment transformation, and Kathy Karr, vice president of consulting services, presented their findings.

Ellsworth began by acknowledging, “there’s a lot of challenging issues before us all.”

All skilled nursing facilities, he explained, are facing difficulties related to Covid-19, the workforce crisis, occupancy shortfalls, and regulatory and payment issues.

The good news, Ellsworth said, is “vaccines remain effective at stopping hospitalization and deaths, and immunity from severe disease appears to be relatively long-lasting for many persons.”

However, Ellsworth also noted that variants are still a concern and the effects of long-haul Covid are still unknown.

Ellsworth also stated that the MCF should be prepared for more scrutiny of the relief funds they received during the height of the pandemic. He explained that when the relief funding was distributed, the regulations on funding were more relaxed. Now the MCF should anticipate audits.

Nursing homes are facing great challenges with staffing and have seen greater employment loss than hospitals, home health care, physician offices and outpatient care centers.

Ellsworth also reported that workforce challenges are projected to increase over the next five years in Sanilac County as the workforce demographics age.

Ellsworth said that the unemployment rates in Sanilac County are coming back down at a relatively steady rate compared to other markets HDG has looked at.

The workforce trends are worrisome, however, Ellsworth said, and require “bold and proactive steps.” Access to a workforce will likely hinder any growth the MCF hopes to achieve.

However, there is sufficient demand to reopen the dementia or memory care unit of the MCF. The unit was closed and converted to a Covid unit.

The conclusion of HDG’s financial review stated that the “declining occupancy and deteriorating payor mix are a significant driver in the declining financial performance.”

The findings also stated that the 2021 departmental expenses are higher than national benchmark levels in the areas of nursing, dietary, housekeeping and benefits. However, in 2020, departmental expenses were similar to county-owned facilities excluding the dietary and housekeeping departments.

The report also gave recommendations in several areas such as customer service, human resource systems and management, billing office and admissions.

Ellsworth reported that in 2020, the average census of the MCF was at 77 percent. In 2021, that dropped to 61 percent, and so far in 2022 it has fallen to 56.7 percent. The report stated that this drop in the census is “relatively unprecedented.”

Though the MCF has 104 licensed beds, they have been restricted to 64 beds since the beginning of this year.

Ellsworth then gave the three strategic options available for the CMF. The first option is to continue operating with 64 beds online and adjust operational costs for a smaller facility. Second, the MCF could open to full capacity and address the workforce shortage.

Finally, the MCF could leave the nursing home business entirely or seek other partnership options.

If the county decided to continue operating the MCF with 64 beds, Ellsworth said that it would be easier to operate on a smaller scale. However, they would not have as many opportunities to grow and would have to operate with smaller margins.

He also said they would need “at least $1 million in annualized cost cutting, but likely more.”

If the MCF opened to full capacity, the first step would be to reopen the memory care unit. In this scenario, HDG also recommended occasional wage scale analysis as well as changes in “compensation strategy and staffing levels.”

Additionally, the MCF would need to develop a plan to allow adequate staffing while reopening all other currently unavailable beds.

Ellsworth said that the county should look into “out-of-the-box” ideas to retain staff. He brought up an example of Lewis County Health System in Lowville, New York. In June 2021, they announced that they would be giving some staff members a 65 percent pay increase.

When considering the final option of leaving the nursing home business or seeking out partnership options, Ellsworth said the commissioners should consider the loss of services to county residents and loss of federal revenue and economic benefits.

He also mentioned that if the facility were sold to a private group, the private group could not receive the same Medicaid benefits the MCF currently receives, making the sale less enticing to a buyer.

The county could also consider partnering with a private firm like HDG which has management expertise or consider another entity to partner with.

Commissioner Joel Wyatt said that he has been asked why the county is involved with the MCF at all.

Ellsworth explained that the county is historically the health care provider of last resort. He said that there are 200 beds in the county, 100 of which are at the MCF.

Commissioner Gary Heberling added that prior to the MCF, there was nowhere in the county for many residents to go.

Wyatt asked Ellsworth what the “prognosis” is for the MCF.

Ellsworth said that the obvious move is to open the memory care unit, hire staff, and have competitive wages. Eventually, the MCF would have to evaluate whether or not to make the other beds available.

Ellsworth did recommend that the county utilize outside expertise.

After some discussion, the commissioners decided to allow time to discuss HDG’s findings with the MCF.

During public comments, MCF Administrator Jill Harding read a statement thanking the commissioners and her staff for their support and stating that the MCF has already begun to implement some of HDG’s suggested changes.

She said, “We are excited for the restructuring of our bed plan that allows us to reopen our Memory Care Unit to enhance the quality of care for our current residents and meet the needs of our community to increase our census.”