Living Center Proposal

Estes Park Health will hold a Tele Town Hall on Wednesday, September 23rd, starting at 6:00 PM, to provide information, facilitate community input, and have time for questions and answers about a proposal to close the Estes Park Health Living Center.

To register for the EPH Living Center Proposal Tele Town Hall on September 23rd at 6:00 PM MDT:

After registering, you will receive a confirmation email containing information about joining the webinar.

Mitigating the Financial Impact of the Coronavirus Pandemic on Estes Park Health: Possible Estes Park Health Living Center Proposal
Questions and Answers

Jump to:
1. Estes Park Health Living Center (EPHLC) Proposal
2. Alternatives to Closing the EPHLC
3. Possible Proposal Impacts
4. Other questions


1. Estes Park Health Living Center (EPHLC) Proposal

1.1. What is the EPH proposal for the EPHLC?
The proposal is to examine the EPHLC business model with the potential for closure.

1.2. Why is this proposed action necessary?
Like many organizations and individuals, Estes Park Health’s income has been severely impacted by the arrival of the coronavirus. Based on current experience and financial projections, we anticipate a 20% reduction in revenues through 2020, into 2021 and perhaps beyond. In response to this serious financial impact, Estes Park Health has been strategically evaluating all services and personnel to determine how we can reconfigure ourselves to be a sustainable and vibrant organization that provides outstanding services addressing the healthcare needs of our community and visitors, now and into the future.

National Center for Health Statistics data show that the percent bed occupancy in nursing homes like the Estes Park Health Living Center has been declining over time. This is partly the result of more people choosing to age at home. According to Doug Farmer, the CEO of the Colorado Health Care Association, the trade group for nursing homes in Colorado, the pandemic has been associated with further nursing home occupancy decreases of 15 to 40 percent.

The Estes Park Health Living Center’s experience has been consistent with these national and Colorado trends as bed occupancy percent has declined over time. There has been an additional decrease in bed occupancy of about 30% this year. Currently, less than half of the 52 licensed beds in the Living Center are occupied. The Living Center’s 2020 financial loss is projected to be about $1.4 million, a loss of about $56,000 for each of the residents. We do not expect the trends in bed occupancy decline and financial loss to change, and that is the source of the challenge we are facing.

1.3. Is this a proposal or has a final decision been made?
This is a proposal. We will be seeking input on the proposal from all persons and parties involved or affected.

1.4. Is this proposal for the pandemic period or does it extend beyond the pandemic period?
The proposal would be for permanent closure.

1.5. When/how will you notify the residents, families, RPH employees, community of the proposal?
We will notify all persons and parties involved or affected through multiple channels: telephone, email, mass email, local newspapers, the Estes Park Health website, among others.

1.6. If this is a proposal, by what methods do you intend to collect input on the proposal?
We will collect input by multiple channels, for example Tele Townhall, telephone, email, among others

1.6.1. From whom and for how long will you seek input?
From all persons and parties involved or affected through multiple channels until about the first or second week of October 2020.

1.7. When do you plan to make a final decision on the proposal?
Our current goal is to reach a decision around mid-October 2020.

1.8. Who will be making the final decision on the proposal?
The final decision will be made by the Estes Park Health Board of Directors based on the recommendation of the Estes Park Health Senior Leadership Team and CEO Vern Carda and based on all of the input received from all persons and parties involved or affected.

1.9. How will you notify the residents, families, EPH employees, community of the decision?
We will notify all persons and parties involved or affected through multiple channels: telephone, email, mass email, local newspapers, the Estes Park Health website, among others.

1.10. If the proposal is approved, when would the proposal be implemented?
Implementation would begin soon after the proposal is approved. The timetable would be consistent with ensuring accomplishment of safety and health goals for resident transfer to equal or better placements.


2. Alternatives to Closing the EPHLC

2.1. Have you considered/tried to sell or lease the EPHLC to an outside organization with what result?
We had conversations with one of the largest national nursing home organizations. They were not interested in purchasing EPHLC. They said the nursing home service segment was in long-term decline and it did not make sense for them to invest in a business that was in long-term decline.

2.2. Have you tried contracting with an outside organization to run EPHLC with what result?
We contracted with one of the largest national nursing home organizations to run EPHLC with the expectation that they would be more efficient, would increase bed occupancy percent, and would reduce the long-term operational deficits at EPHLC. That did not happen, and the long-term trend in bed occupancy percent decline continued under their management.

2.3. Have you considered different ways of changing the economics, with what outcome?
Discussions about approaches to mitigate the long-term trends in operating deficits and declining bed occupancy have continued for a long time. (see below for options considered).

2.3.1. Could insurance pay more and subsidize Medicaid?
The vast majority of EPHLC residents are funded through Medicaid. The amount that the non-Medicaid residents would need to pay to make EPHLC break-even is unrealistic, perhaps on the order of an additional $150,000 or more per year on top of what they are currently paying.

2.3.2. Could private payers pay more and subsidize Medicaid?
The vast majority of EPHLC residents are funded through Medicaid. The amount that the non-Medicaid residents would need to pay to make EPHLC break-even is unrealistic, perhaps on the order of an additional $150,000 or more per year on top of what they are currently paying.

2.3.3. Could you use extra space for adult daycare for increase revenue?
It may be possible to offer adult daycare but offering adult daycare could not generate sufficient revenue to make up the financial deficit EPHLC generates.

2.3.4. Could you expand EPHLC’s number of beds to become profitable?
No. EPHLC has been unable to fill all of the 52 licensed beds it has currently and has never approached 100% bed occupancy. The average census for the past 10 years has been 38. The facility does not have the ability any longer to house 52 residents. Even with all 52 beds occupied, it is not clear that EPHLC would be profitable. Current limitations include capacity, infra-structure, staffing, and increasing regulations.

2.3.5. Could you expand EPHLC’s programs (ex. add memory programming) so more people come and it becomes profitable?
It seems unlikely that adding any programming would increase bed occupancy percent.

2.3.6. Have you, could you advertise EPHLC so more people come and it becomes profitable?
Various approaches have been tried over the years without beneficial impact.

2.3.7. Could you change staffing to reduce expenses?
No. As a Medicaid provider, there is little flexibility about staffing. The challenge presented by declining bed occupancy is that expenses remain fixed while revenues decline.

2.3.8. Could you move to a different location to reduce expenses?
Moving an EPH-owned service would not solve the fundamental economic problems.

2.3.9. Could you ask the community for more property tax to fund the Living Center?
To succeed in a request to increase property tax is very challenging under the best of circumstances, even when widespread benefit to the entire community is apparent. Current property tax support for Estes Park Health generates about $3 million per year. We would need the majority of property taxpayers to approve increasing their property tax support of Estes Park Health by about 50%, with all of the tax increase allocated to EPHLC for EPHLC to break even in the near term. With national and state and EPHLC trends all indicating continued decline in percent occupancy, property tax support would need to continue increasing over time to continue to make EPHLC financially viable. All of these factors make this approach unlikely to succeed.

2.3.10. Are you charging the maximum allowed by Medicaid, and if not, would charging the maximum make EPHLC more financially viable?
EPHLC charges close to the maximum allowed by Medicaid. Charging the maximum allowed by Medicaid would have minimal impact on the current financial fundamentals.


3. Possible Proposal Impacts

3.1. What would happen with current EPHLC residents?
Because what is under discussion is a proposal, the following outlines preliminary thoughts

3.1.1. How many EPHLC residents would be affected?
All current EPHLC residents would be affected if the proposal were implemented

3.1.2. Would residents and their families have choices about timing and placements?
Every effort would be made to accommodate the preferences and choices of residents and their families in terms of timing and alternative placements

3.1.3. Could you ensure other locations that would accept current EPHLC residents?
In preliminary discussions with nursing homes within 50 miles of Estes Park, a number of nursing homes with outstanding ratings would be willing to accept EPHLC residents.

3.1.4. Could you ensure alternative placements would have equal or better quality at equal or better cost?
Every effort would be made to ensure alternative placement choices will be equal or better quality. For Medicaid residents, payments are standardized so increased costs would not be expected.

3.1.5. Could you ensure other locations would be as good or better than EPHLC?
There are a number of nursing homes within 50 miles of Estes Park that have quality as good or better than Estes Park that would accept EPHLC residents.

3.1.6. Would you ensure friends would be able to stay together?
Every effort would be made to ensure resident preferences were accommodated.

3.1.7. How would this affect the ability of family and friends to visit residents?
We regret that moving current residents to alternative placements would unavoidably make visitation more challenging for family and friends living in Estes Park.

3.2. What would happen with current EPH employees in the EPHLC?
Every effort would be made to find alternative placements for current EPHLC employees.

3.2.1. How many EPHLC employees would be affected?
Approximately 30.

3.3. How many other EPH departments would be affected and which would they be?
Housekeeping, Dietary, Laundry, and Facilities

3.3.1. How many other EPH employees in departments outside the EPHLC would be affected?
Approximately 7.

3.4. What would the impact on EPH finances be?
Current estimates are that EPH expenses would be reduced by $1.4 million.
This would be just one of several proposals considered to make EPH financially viable in 2021 and beyond.

3.5. What would the overall impact on EPH employees be?
This proposal would be challenging for EPH, but the hope would be that the adverse impact would be mitigated by understanding that this and other proposals are needed to ensure EPH’s long-term survival.

3.6. What impact would there be on employee morale and organization commitment?
This proposal would be challenging for EPH, but the hope would be that the adverse impact would be mitigated by understanding that this and other proposals are needed to ensure EPH’s long-term survival.

3.7. What would the impact on EPH reputation be?
Our hope would be that our community would understand that the difficult financial environment needs to be faced directly and that difficult decisions need to be made to ensure EPH’s long-term viability. We would hope that by facing this challenge directly and communicating with our community, our reputation may be retained or enhanced in these difficult times.


4. Other questions:

4.1. Why can other organizations make money in this business and EPH has not, cannot?
EPHLC’s challenge is the relatively small number of certified beds compared to competitors and the payor mix with the vast majority of residents being Medicaid. Medicaid payments do not begin to cover actual costs.

4.2. If you stop EPHLC services, what other services will you offer seniors in its place?
EPH is initiating a community health needs assessment in the fall of 2020, and this should help us determine services the community needs that we could competitively provide and that would be financially viable. This topic will be discussed in detail in a series of public meetings.

4.3. There are a lot of old people in the Estes Valley. Why can’t you make this work here?
EPHLC’s challenge is the relatively small number of certified beds compared to competitors and the payor mix with the vast majority of residents being Medicaid. Medicaid payments do not begin to cover actual costs.

The issue is also affected by the relatively small size of our community and the fact that, it is not the number of “older” people that is important, it is the number of “older” people that need assistance with activities of daily living that could affect the number of community members eligible for nursing home services. However, the long-term trend toward more people preferring to age at home and not enter nursing homes is having a significant impact on declining bed occupancy in nursing homes.