Everything Highland Oaks has built has been for “the grandmothers and grandfathers” in its community to have a place to grow old while maintaining a high quality of life.
Coming out of the pandemic, however, the church-owned facility is finding that its model, a model that stayed relatively the same for over the past 30 years, has become increasingly difficult to maintain.
“I think there’s still a question of whether we can survive or not long term, in the current building with the current model,” Matt Kinsinger, executive director of the facility, told Skilled Nursing News. “I don’t think we know the answer to that yet. I think the primary thing that keeps us going is that we ask ourselves where our residents are going to go.”
Elgin, Illinois-based Highland Oaks is mostly private pay, with 12 out of 52 beds reimbursed by Medicaid.
“Sometimes we have a little bit more, sometimes we have a little bit less, but we kind of control that with the admissions policy because we couldn’t survive if it was 50/50,” Kinsinger said.
This is because Medicaid reimbursement in Illinois isn’t sufficient to cover the full cost of care, Kinsinger added. It’s an issue in most other states as well.
“We are licensed for Medicaid, and the purpose for that was that nobody would ever have to leave us,” he said. “But that’s becoming increasingly more difficult.”
Built in 1985, Highland Oak’s occupancy has historically been around 98%, according to Kinsinger. Then Covid hit.
Moving forward, the facility may have to open its facility more to short-stay Medicare patients and look to transition more to private rooms. Yet even that presents challenges.
“Part of the struggle is with a small, standalone home,” Kinsinger explained. “Do we really want to spend the money to build out the facility so that we can make the model work?”
“We probably could do it with private pay,” he said. “But we’ve always taken the position that if you’re in our facility, nobody’s ever been asked to leave for running out of funds, and up until recently all of our beds are certified for Medicaid.”
Remaining in the long-term rehab business
With 52 beds, Highland Oaks is holding its occupancy at the level that it can staff for, and with strict staff-to-resident ratios that it adheres to, its bed counts are the lowest Kinsinger has ever seen.
“We sit with under 40 residents for the first time ever,” he said.
Highland Oaks isn’t the only standalone nonprofit facility feeling the strains of the current operating environment, as more than 3,000 skilled nursing facilities experienced a change in ownership between 2016 and 2021, the majority of which were not-for-profit.
The American Health Care Association/National Center for Assisted Living projects that 400 more nursing homes could close by the end of the year.
Among the biggest challenges skilled nursing operators continue to face is staffing. While drawing new staff to the industry has become increasingly more difficult, Kinsinger said the biggest problem has become that people are just burnt out and tired.
Historically focused on long-term care patients, Highland Oaks has “resisted” the urge to get into the short-stay rehab business. That also may be getting a second look moving forward, though Kinsinger wants the organization to remain a long-term rehab provider.
On the therapy side, Highland Oaks is contracted with Genesis Rehab and gets paid based on the number of beds it serves.
“We try to give our residents the best possible experience. We want to avoid people coming on Monday and leaving on Friday with new faces and new people everyday. It’s their home,” Kinsinger explained. “It’s an old model, and, quite frankly, it’s the least profitable model, too, but it’s always worked out. I think that it would change who we are if we did that.”
He said that Highland Oaks serves a “niche market,” and that’s what it remains interested in doing.
“It is kind of tempting at times to do the short-term stays because it is more profitable over the years,” he explained. “But then when I think of the activities and the dietary and all of that, it’s all woven together in a facility like ours and we attempt as much as possible to make it a home-like environment and we’ve just decided to do that as long as we can.”
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