Two nursing homes close and may signal a trend

They outlasted COVID-19 but are shuttering amid rising costs and limited funds. Some expect this to be the start of more closings
Credit: (Gundula Vogel from Pixabay)
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After 83 years as a nursing home that filled a unique cultural niche in Emerson, Bergen County, the Armenian Nursing & Rehabilitation Center closed its doors on Easter Sunday, a victim of a changing industry and the coronavirus pandemic.

The Villa at Florham Park, a nursing home in southern Morris County with a 130-year history, is scheduled to follow suit in the weeks to come.

“This whole thing is so scary. You’re just hoping the next place isn’t going to close too,” said a New Jersey woman whose brother will be forced to move from The Villa, where he has lived for a year-and-a-half. “I guess it’s survival of the fittest — or the ones that can change,” said the woman, who declined to be identified because of concerns over her brother’s privacy and care.

The Armenian home and The Villa, both nonprofits, have received high marks for quality care over the years and together cared for dozens of COVID-19-positive residents who survived, and others who did not. But a combination of long-standing financial challenges, increasingly costly regulatory requirements and expenses associated with the pandemic appear to have pushed them over the edge.

According to a message posted April 2 on the Armenian home’s website: “(O)ver the last several years the Home struggled to compete with the growth of assisted living and home health care services and finally succumbed to the financial effects of the COVID-19 pandemic. We want to sincerely thank our residents for allowing us the joy of caring for them over these past 83 years as well as their supportive families and friends.”

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Representatives for the two facilities did not respond to multiple requests for comment, but New Jersey nursing home leaders, elder advocates and family members shared similar concerns about the enormous impact of COVID-19 on an already unstable industry. Nursing homes were particularly hard hit by the coronavirus, which was often introduced by staff members working at multiple sites and spread quickly among the vulnerable population.

Nursing home industry reforms

More than half the state’s COVID-19 fatalities involved deaths in nursing homes last spring, prompting the state to hire a consultant whose report identified multiple weaknesses within industry operations and state oversight. That led to reforms heralded by elder advocates but often opposed by industry leaders.

Now, as the pandemic is receding, some experts warn that these closures are not isolated incidents, but indications that a long-standing trend is on the upswing. “I think this is just the beginning,” said Laurie Brewer, New Jersey’s Long-Term Care Ombudsman, whose office serves as an independent advocate for residents.

Brewer’s office must be notified of these closures, and she said it has also recorded shutdowns this year in several assisted living facilities — where residents live more independently in their own apartment-style unit — and is now reviewing the closure plans for another nursing home, in which individuals live one or more in a room and depend on nurses to provide medical treatments or significant daily assistance. “That’s more than normal,” she added. “There’s definitely some churning going on in the industry.”

Jim McCracken, president and CEO of LeadingAge of New Jersey and Delaware, which represents nonprofit long-term care operators, said the pandemic exacerbated the industry’s existing problems and highlighted the need to address historic concerns, like the lack of frontline staff. It also presented new challenges, like the added cost of testing equipment and extra infection-control measures.

“I certainly hope it’s not a trend,” McCracken, who previously served as state long-term care ombudsman, said of the latest closures, “but time will tell. COVID has placed a lot of stressors on the long-term care community and nursing homes in particular.”

But Brewer, who has spent years working with the long-term care industry, doesn’t see the trend as all bad. “I think it’s inevitable,” she said. Medicaid, which pays for at least seven out of 10 nursing home residents in New Jersey, was already shifting to fund more home- and community-based services, she explained, and families may favor that model more in the future, given the impact COVID-19 had on nursing home residents.

‘This is the direction this industry is going’

The pandemic “just underscores the fact that this is the direction this industry is going. It may have accelerated it, however,” Brewer said.

New Jersey now has about 370 nursing homes, three-quarters of which are for-profit operations. The state Department of Health, which licenses and inspects nursing homes and has led the state’s efforts to improve the industry’s COVID-19 response, did not comment on the closures.

Whether the closures are part of a move toward “rightsizing” the industry or not, the actions are hard for residents, family members and staff, experts agree. “Anytime you move people out of a long-term care facility it’s traumatic for the residents. It simply can’t be avoided,” Brewer said, urging people to contact the ombudsman’s office if they need help.

According to plans filed with the state on Feb. 8, operators at the 86-bed Armenian home provided residents’ families with a list of seven other facilities in the region, five with spots open for Medicaid members. Follow-up communication with the state indicates all residents did eventually find a new home.

The woman whose brother lives at The Villa said she was informed by staff about the closure in late April and told she had 60 days to find him a new home. She said it is a big loss for her brother, who had become comfortable there, and sad, shocking and frustrating for her family, who like the facility and the caregivers.

She said she is now working through a list of other potential options, balancing financial considerations, her brother’s need for services, location, transportation requirements and other factors to decide what makes sense. “There are a lot of choices,” she said, noting many places now have open beds.

Long-term care closures, lower occupancy

According to data compiled by LeadingAge’s national office, some 550 nursing homes closed nationwide between 2015 and 2019, with nearly 200 in the last year alone. New Jersey appeared to lose at least nine facilities, which left the state with 223 fewer beds after those four years, it showed.

Despite this capacity drop, the occupancy rate at nursing homes also has declined nationwide, the LeadingAge study showed. By June 2019, New Jersey’s occupancy rate was nearly 83% — slightly higher than the national average, but 3.7 percentage points below where it was in the summer of 2015.

While state officials declined to provide specifics, the census at New Jersey nursing homes has since plummeted further, a result of COVID-19’s high death toll among their elderly, vulnerable population and declining admissions of new rehab patients and aging community members, experts note. More than 8,000 long-term care residents and staff died from COVID-19 since last year, according to state data.

The skilled nursing facility at Seashore Gardens Living Center, a 102-year-old nonprofit home for Jewish elders in Galloway Township, now has just over half its 140 beds filled, according to CEO Martin Klein, who has run the facility for decades. While the Medicaid reimbursement was increased under the pandemic — something the state has pledged to keep in place next year — Klein said the operation still loses about $10 a day on each publicly insured resident.

“Anyone in their right mind, who knows profit and loss, why would you be in this business?” Klein asked. Luckily for residents at Seashore’s nursing home, he said the operation is supported by the far more lucrative assisted and independent senior living programs that share the carefully landscaped 20-acre Atlantic County campus.

In Mercer County, Greenwood House Senior Healthcare is facing similar hardships, executive director Richard Goldstein explained. The sprawling Ewing complex provides memory care, assisted living and other services, including skilled nursing, which Goldstein said operated at about a $1 million annual deficit before the pandemic. Like Klein, he said the other operations help support the nursing home.

“Skilled nursing is a very difficult service line. Medicaid underpays all of us,” Goldstein said. “That’s why you have more nonprofits leaving the skilled nursing sector — or getting bought out by for-profits,” he added.

Federal involvement

Greenwood House, like many nursing homes, benefited from some federal emergency aid under the pandemic, including federal grants and further state funding to help pay for additional gowns, masks and other personal protective equipment, or PPE, for staff, Goldstein said. “That got us through the year,” he said. “But if it wasn’t for that, I don’t know where we would be.”

But Klein and Goldstein are also frustrated with other government actions taken during the pandemic that they said only complicated their work and increased the cost of business. Both complained that regulatory enforcement, much of which is handled through the state health department, has become increasingly punitive over the years, with the focus on generating violations — and assessing fines — instead of fixing the problem.

“The government kept saying they wanted to help us,” Goldstein said. “But then they would come in in the middle of a crisis and give you deficiencies for the littlest things.”

These operators also said many of the well-intended reforms initiated in the wake of a consultant’s report, like a requirement to increase the ratio of bedside staff to residents, are unrealistic given the existing shortage of certified nursing aides. “I think the good facilities were already doing a lot of this,” Goldstein said, “but there are poor operators that needed to step up.”

READ: NJ wants more caregivers for each nursing home resident

WATCH: ‘No one was prepared.’ NJ’s top health officials assess the year of COVID-19

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