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Profits over People?

Officials scurry to stop skilled nursing closures

by Thadeus Greenson

September 22, 2016 State and local officials continue to fight the proposed closure of three local skilled nursing facilities, warning the closures would create a crisis with reverberating impacts throughout the region.

Rockport Healthcare Company — which manages all five of Humboldt County's major skilled nursing facilities on behalf of Brius Healthcare — recently announced its intent to close three local facilities, which combine to house and care for nearly 200 of the county's most vulnerable residents. In filing closure and relocation plans with the state Department of Public Health, Rockport claimed the closures were necessitated by a severe staffing crisis at the facilities that had caused the company to lose more than $5 million over the past 18 months, leaving no viable alternatives.

But many charge Rockport is simply putting large profits over basic community — and human — needs.

A flurry of activity has followed the company's announcement last month that it intends to shutter the facilities, which would reduce the number of beds in local skilled nursing facilities by 60 percent. Most notably, the Office of the California Long Term Care Ombudsman is petitioning the Department of Public Health to place the three facilities — Eureka, Seaview and Pacific Rehabilitation and Wellness — under receivership, which would be unprecedented.

If they proceed, the closures would have reverberating impacts throughout Humboldt County. First and foremost, the closures would leave only about 38 local beds to take in the 190 or so displaced patients, meaning many would have to be moved hundreds of miles elsewhere in California or into Oregon, in some cases further compacting bed shortages in those communities. The transferred patients would also be at risk due transfer trauma — or the phenomenon that sees frail and elderly patients suffer steep declines after being moved long distances to new facilities. But the closures would also leave an ongoing problem, as these facilities are heavily relied upon by two populations: those recently discharged from the hospital who need extensive nursing care to recuperate before returning home and the frail elderly and disabled who need long-term care.

The closures would also leave hundreds of local healthcare workers jobless.

Currently, the Department of Public Health is considering a second closure and relocation plan submitted by Rockport, after the first was rejected on the grounds that it didn't provide adequate detail on how the company would address transfer trauma or specify where the 136 patients who can't be accommodated locally would go.

North Coast state Sen. Mike McGuire urged the department to again reject Rockport's plans, which he states in the letter now include a provision for the three facilities to stop accepting new patients on Sept. 24. "This will immediately usher in a crisis that could otherwise be avoided if the company were to stagger the closures or — as we have requested multiple times — simply not close their facilities or seriously evaluate an alternative operator," McGuire wrote.

As McGuire hints, many officials have voiced frustration that Rockport seems to be a reluctant — and even a dishonest — partner in any discussions trying to chart a path forward that doesn't include the abrupt closure of the three facilities.

In a scathing letter to Department of Public Health Deputy Director Jean Iacino, the National Union of Healthcare Workers (NUHW), which represents some 12,000 caregivers in hospitals and skilled nursing facilities across the nation, indicated it has "profound" concerns about the proposed closures and that it is dubious of the reasons proffered for them.

Rockport CEO Vincent Hambright has repeatedly stated that his local facilities have had trouble fielding a qualified workforce, sometimes blaming the local marijuana industry for competing for workers, as he did at a recent meeting with residents and their families (see "What Will Happen to Ma and Pa?," Sept. 15). To underscore his point, Hambright has said the company has lost $5 million in revenue over 18 months due to having to recruit and house temporary staffing from outside the area.

In its letter, NUHW uses data Rockport itself submitted to state regulatory bodies to dispute these claims. First, the union points out that for the 12-month period ending Oct. 31, 2015, Rockport reported to the state that only 1.4 percent of its full-time-equivalent positions at its five Humboldt facilities were filled with temporary employees. Further, the company's earnings statements submitted to the state indicate it netted more than $5.4 million in profit from the five facilities in the five-year period from 2011 through 2015.

That profit includes a combined $1.5 million loss from the facilities in 2015, but NUHW says that needs to be put in some context.

"The $1.5 million loss pales in comparison to the profits Brius enjoys from its approximately 81 nursing homes and assisted living facilities across California," the letter states. "Brius, which controls one of every 14 nursing home beds in California, is our state's largest nursing home company and recently began expanding to Nevada and Texas. In 2014, Brius reported profits of $77 million from its California facilities in a report to the California Attorney General's Office."

"We disagree that there is 'no other option' than to shut down the three nursing homes and displace hundreds of frail elderly residents," the letter continues after noting that Brius CEO Shlomo Rechnitz also boasted during an interview with ESPN of taking in $3 billion in annual income. "It is commonplace in the healthcare industry for companies to use the profits generated at some facilities to subsidize other healthcare facilities performing vital service to our communities."

All that said, NUHW concedes there's a staffing problem at Rockport's Humboldt County facilities. Almost 78 percent of the company's employees at Eureka Rehabilitation and Wellness turned over — meaning they left and were replaced — over the 12-month period ending Oct. 31, 2015, according to NUHW's letter, which the union attributes to "substandard wages and poor working conditions."

Attempts to reach Rockport for this story were unsuccessful.

Rockport has also blamed low MediCal reimbursement rates in rural areas for hamstringing the company's efforts to keep doors open in Humboldt County but, as we reported last week, the company's five local facilities all receive reimbursement rates exceeding the state average.

North Coast state Assemblyman Jim Wood sent out a press release noting that he and Partnership HealthPlan of California — the local MediCal distributor — are working hard to prevent the closures, noting that Partnership has already pledged to increase state reimbursement rates to local Rockport facilities by 2 percent, with another 2 percent bump if Rockport were to participate in a program to improve patient safety and care.

Wood states in the release that he's working and has identified both some short-term options and long-term solutions to keeping these facilities open.

"Now the rubber hits the road," Wood said in the release. "We have identified several solutions and now need to see Rockport step up and respond by not closing the facilities and continuing to work with all stakeholders to remain a provider for the long term."

Meanwhile, as Wood and McGuire do what they can to apply pressure and find solutions behind the scenes and the Department of Public Health weighs whether to take the unprecedented step of trying to put the facilities into receivership, a community sits on edge, wondering if a company will be allowed to put seven-figure profits above some of the most vulnerable among us.







