Good Samaritan CEO: Nursing Homes Face Triple Threat on Road to Recovery – Skilled Nursing News

The skilled nursing industry is staring down a triple threat.

Providers are being challenged operationally, clinically and financially at least in part due to rising labor and care costs, among other factors.

Not-for-profit senior care giant Evangelical Lutheran Good Samaritan Society has had to close or sell nine facilities in just the last eight months the majority of which were in rural communities.

Good Samaritan also has nearly 2,000 job openings, amounting to roughly 14 openings per facility.

Despite the present obstacles standing in the way of the industrys Covid recovery and future stability, CEO Nate Schema believes it would be a critical error to continue down the same path and allow more nursing homes to close especially those serving the most vulnerable residents in underserved or rural parts of the country.

The American Health Care Association/National Center for Assisted Living (AHCA/NCAL) has projected 400 SNF closures in 2022, with nearly 240,000 job openings as a primary driver.

Its a long-term plan, according to Schema, and significant change wont likely occur for months if not years.

While were large enough and weve got the resources necessary to navigate this, were going to continue to see additional challenges in our sector and in our space if we dont see some changes within the sector, Schema said recently on an episode of the Skilled Nursing News Rethink podcast.

Highlights of Schemas podcast, edited for length and clarity, are below. Subscribe to Rethink via Apple Podcasts, Google Podcasts, or SoundCloud.

I think one of the biggest takeaways I had was how engaged the staffers and the senators were up on [Capitol Hill].

I think youre always hopeful that theyre going to have a really good handle on the issues that might be in your sector, but with everything thats happening up on the hill right now youre just always a little concerned that maybe itll be white noise or be lost because theres just so many other topics. So I think what was really cool for us to see was they understood how challenging some of these workforce issues were, they understood the needs of the sector and how much we were hurting in long-term care.

I think what was really cool to hear, and see as a takeaway from our time there I was talking with one of my team members and he said, Hey Nate, one of the senators offices that we met with they signed on to the letter. So it was just so affirming that they heard us and theyre really invested in seeing everything that we do and seeing all the residents get the care and address some of the workforce challenges that were seeing. So that was probably one thing and then of course seeing Sen. [Joe] Manchin there in person talk through his firsthand account of all the different dynamics up on the hill and just how hes lived that out firsthand.

The Good Samaritan Society, having some buildings in West Virginia, I think it just helped me better understand how to communicate and advocate for the different needs that we have within our sector.

100% feel better about it. Ive had the unique opportunity to be in front of CMS Administrator Chiquita Brooks-LaSure and also Secretary of Health and Human Services [Xavier] Becerra over the last couple of months, and so Ive been able to see how theyve responded to our sector and listen to where weve been and where we stand right now.

I would say that initially I was thinking, Gosh Im not sure these folks really understand just what this looks like and how this is coming to life in our sector. All of us feel the pain of going to get a hamburger right now and spending $25 to get a burger and fries I feel that acutely.

But whats unique about our sector is we dont have the ability to pass those costs on. So as our supplies are going up, as our labor costs are going up, we dont have the ability to pass those on to our residents and their families when were serving 50 plus percent Medicaid population. So to hear the responses early on a month or two ago from the administrator to Secretary Becerra and then now to see the responses from the senators, its evident to me that theyre getting this. Theyve done site visits, theyre hearing from their members and theyre understanding just how real our issues are.

Instead of being the go-to guy for everything, being in the mix on every issue, Im learning how to best use the gifts and talents of my team. I feel like I have an extraordinarily talented group of leaders and vice presidents around me and Im figuring out that I dont need to be the one that has the answer all the time. Im getting better at asking the right questions to help them grow and to help best utilize all the gifts and talents. Nine times out of 10 they have all the answers, weve just got to make sure that were asking the right questions. I feel like with each passing month, with each passing board meeting, with each passing all staff meeting, Im getting a little sharper at doing that.

Without a doubt I feel more confident. I think the reason why Im very optimistic about our future and being a really strong nonprofit organization: One, weve had tremendous support through our acute care partner at Sanford Health. What were able to do as an integrated health system, maybe differently than independent operators and especially being in rural health is were able to invest in some innovations that other organizations just dont have the opportunity to do.

Most recently weve announced a virtual care strategy and initiative through the very generous gift of a philanthropist that has our organizations namesake, T Denny Sanford. He blessed us with a $350 million gift. Were going to be launching this game-changing initiative here in August and really standing up a virtual care hub with the idea of being that were going to be able to bring care closer to home. Whether youre in a small rural community in North Dakota or maybe youre in Minneapolis, were going to be able to bring those specialties to the bedside in maybe a new and exciting way. So Im pretty darn excited about what the future holds and feel like weve got the talent and resources to make it happen here and be able to serve for another 100 years.

Its always been part of our philosophy that If one of our communities has needs, were going to do everything we can to get the resources there. One of the blessings as a large organization is that we have additional resources that we can find folks from across the country, whether thats bringing in agency support or moving caregivers from one community to another that might have a few more needs.

Weve been able to figure it out, but I think what weve learned now over the last year and a half, and probably more specifically even over the last six to eight months, one the people arent there and the people that we are able to find are costing us anywhere from two to three times what it would it did pre-pandemic. So now were paying physician wages for caregivers, were paying 100 plus dollars an hour for these folks. Quite frankly the math just doesnt work anymore, its creating untenable situations. Were not able to subsidize some of these locations in maybe a way that we were a year or two ago.

So weve decided to shift our strategy and say, Look, were going to do everything we can to ensure that our people get the very best care and have an outstanding experience. But in some cases that means were going to have to limit admissions and weve done just that because it just doesnt work anymore to continue to say at all costs were going to bring people in because what were seeing and feeling here in the upper Midwest and across our footprint in 22 states its just too expensive.

I think thats been another thing thats evolved here over the better part of the last year. We talked about Gosh were in an operational crisis, were in a clinical crisis and its quickly become a financial crisis. Right now were seeing about 20% of our locations that have what I would describe as one of our key leadership positions open.

So one of the things weve done is weve been really intentional about standing up an administrator council and selecting a number of individuals across organizations so they have direct feedback with our executive leadership team, so they have a voice and so that we can be even more responsive than we had been in the past.

I think the other pieces that were really committed to is, and one of the passions of mine, is how do we continue to develop and invest in these young leaders. I just think that our young leaders have to be given the tools, resources and support that they need to develop and grow early on. Some of these folks, if you think about it, if theyve started in the last few years all they know is how to operate a community within the pandemic.

I would hate to believe that some of them think thats normal because its absolutely not Im just passionate about ensuring that we get these folks back to a new normal because the current new normal doesnt work.

Weve demonstrated and figured out how to be an extremely resilient organization and, like everything, were going to figure it out. Were going to get our really smart folks in the room and were going to navigate this thing.

Being a provider that is primarily rural We need folks to understand the types of access issues that might exist if we dont figure this out. While were large enough and weve got the resources necessary to navigate this, were going to continue to see additional challenges in our sector and in our space if we dont see some changes within the sector. So short-term are we going to be fine? Yes, but it will ultimately lead to potentially some other difficult decisions both here at the Good Samaritan Society and I think throughout the sector.

I think the biggest thing weve learned is how much we need each other. I think were talking more across the health care landscape than we ever did before, and I dont know that thats specifically unique to Sanford and Good Sam. That said, I think we can do it more efficiently and more effectively.

What weve seen now is if a nursing home doesnt have staff, theyre not going to take admissions and so then its backing up our hospitals. I think what were starting to see now Is our acute care partners are really starting to feel that pain in a different way.

I think the other piece is, through the pandemic, weve learned how to become really agile.

I think its an overwhelming yes. Our rural locations are part of these communities, theyre often the fabric of these communities. In some places theyre the largest employer of these communities. Like many things, care looks very different today than it did 50 or 100 years ago. As an organization that has been serving that long Were committed to figuring out a way that were able to live out our mission for another 100 years.

We know that the industry has to change and we know that were able to figure out creative solutions to provide unbelievable health care in rural communities and how to do it at scale and in an efficient way. But were going to need help from our policy makers and were going to need the help of our state leaders to be able to figure this out. I dont think its something that gets done in a matter of months, were talking years, but we also need everybody to understand the impacts that were going to see and experience if we do nothing or if we say were okay with 300 nursing homes closing because we have too many.

Unfortunately, theyre going to have people that are going a long way for care, and I dont think thats OK. Or youre going to see a disproportionate impact, whether thats in urban underserved areas or youre going to see some rural disparity that I dont think were OK with as a nation.

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Good Samaritan CEO: Nursing Homes Face Triple Threat on Road to Recovery - Skilled Nursing News