Families Scramble, Industry Sounds Alarms As Washington Nursing Home Closures Rise

Keith Akada thought Keiro Northwest Rehabilitation and Care Center in Seattle’s Central District would be the final resting place for his mother, Mieko, who has Alzheimer’s disease.

The nursing home opened in 1976 to serve aging issei, first-generation Japanese Americans, who faced exclusion and racism. For decades, it’s provided culturally sensitive care to the area’s Asian and Pacific Islander community.

Akada’s grandmother was one of its first residents. His father, who was interned during World War II, spent the end of his life there in 2011, receiving hospice care.

Akada’s mother moved there two years ago.

But last month, Keiro Northwest told her and 114 other residents that they would need to move. The facility announced it was closing for financial reasons.

For Akada, the news was devastating.

“It’s just disheartening because the care that she receives here is, I know, something that’s just not going to be duplicated somewhere else,” he said.

At first glance, Keiro Northwest looks like any other nursing home. But Akada says the staff work hard to honor the cultural backgrounds of the residents. Traditional Asian foods and dishes are offered at each meal. Asian artwork adorns the walls. There are Japanese singalongs and sushi making activities. Some of the staff even speak to the residents in their native language.

Now, Akada is madly searching for a new home for his mother. She’s on waitlists at five nursing homes and under consideration for placement in two adult family homes.

“There’s no real way to understand that stress level of the unknown,” Akada said.

Vanishing Beds

Keiro Northwest is just the latest in a wave of nursing home closures in Washington that’s forcing patients and their families to scramble to find new facilities.

Each time a nursing home closes, it forces vulnerable residents to endure disruptive — and potentially dangerous — moves. They can experience what’s known as “transfer trauma,” which sometimes leads to death.

Industry officials have warned state lawmakers that nursing home closures will continue without emergency funding. However, most Washington state officials say they’re not yet alarmed.

Since February 2017, 16 Washington nursing homes — from Seattle to Ritzville — have closed, announced they will close, or converted to assisted living, according to the Washington Health Care Association (WHCA), which advocates for the nursing home industry.

This represents a rapid acceleration in closures. For comparison, Washington lost 31 nursing homes over the past nine years, according to data provided by Mick Cowles of Cowles Research Group in Anacortes, who tracks the nursing home industry nationally.

The total number of beds going offline is more than 960 out of 20,535 skilled nursing beds in the state, or about 5 percent, according to the Department of Social and Health Services (DSHS). Currently, there are 215 licensed skilled nursing facilities in Washington.

Among the facilities converting to assisted living is the 30-bed Vashon Community Care Center, the only skilled nursing facility on the island, forcing several residents to find placements on the mainland, in some cases farther away from family members.

While concentrated in the greater Puget Sound region, the nursing home closures also have hit rural Eastern Washington, with facilities closing or converting in Ritzville, Tekoa and Selah.

The nursing home industry says the closures are primarily the result of inadequate Medicaid reimbursement rates. Medicaid, the joint state-federal health care program for the poor, accounts for 60 percent of nursing home revenue in Washington. Currently, about 9,700 Medicaid clients are receiving care in Washington nursing homes.

Medicaid reimbursements are based on the level of care the patient requires. Washington’s average Medicaid rate for nursing home care is $216 a day. By contrast, Oregon will pay an average of $326 a day starting in July.

To date, about half of Keiro Northwest’s 115 nursing home residents have been moved as the facility prepares to close its doors in October. CREDIT AUSTIN JENKINS/N3

According to an industry analysis, Washington has the fourth highest Medicaid shortfall in the country behind Wisconsin, New York and New Hampshire. In 2017, that shortfall amounted to $43.28 per patient, per day — a number that’s expected to widen to $48 for 2018.

Bill Moss, the assistant secretary at DSHS for the Aging and Long-Term Support Administration, said his agency is working to understand the gap between what Medicaid pays and what it costs to care for someone. But, he said: “We’re pretty certain it’s not a $43-a-day shortfall.”

Problems Run Deep

But problems in the state’s nursing home system go beyond Medicaid funding. Industry insiders say new state and federal regulations, a rising minimum wage, and staffing shortages also have strained the system. Other challenges include a consumer shift from nursing homes to in-home care and other alternatives.

A 2018 study commissioned by WHCA highlighted those challenges: thousands of unfilled long-term care jobs, a nearly 20 percent staff vacancy rate and a steep increase in the use of expensive, contracted staff to temporarily fill openings.

On its website, not-for-profit Keiro Northwest identifies several reasons for the closure of its skilled nursing facility, along with its home care program and other services. Among them is Medicaid funding, but also a recent state requirement for 24/7 nurse coverage, Seattle’s $15 an hour minimum wage, deferred maintenance costs and investments that didn’t pay off.

“Keiro Northwest had been operating at a loss for many years,” said CEO Bridgette Takeuchi. “That just continued to snowball and continued to grow over time.”

By the time Keiro’s board decided to close the facility, Takeuchi said it was losing $300,000 a month. It’s Medicare star rating also had fallen from five stars to two. 

Vashon Community Care also struggled with staffing issues, particularly because of its island location; it resorted to temporary workers, which cost 50 percent more.

“The cost of skilled nursing today versus the reimbursement, as well as the challenge with getting adequate staffing certainly is one of our biggest challenges,” said Mike Schwartz, the facility’s executive director.

Of his facility’s 23 residents, Schwartz said seven will be able to remain, while most of the others are moving off the island to a nursing home operated by Tacoma Lutheran Retirement Community.

In Whitman County on the Idaho border, the Tekoa Care Center — which specializes in serving behavioral health clients — converted to assisted-living largely because of state and federal regulations, said co-owner Josh Wester.

“The skilled nursing facility regulations are tailored to a different type of clientele,” Wester said. He added that only five clients had to be moved to other facilities.

Emergency Declared

In a June 5 letter to state lawmakers, the industry and Washington’s Long-Term Care Ombudsman jointly called for “emergency funding” to stave off additional closures.

“We are deeply concerned that without immediate emergency intervention, skilled nursing facilities will continue to close, creating an uncertain future that causes anxiety for patients, families and workers,” the letter said.

The state’s two leading budget writers, state Sen. Christine Rolfes and state Rep. Timm Ormsby, both Democrats, said they received the letter.

“The fact that we have a trend developing about these facilities closing, it is very concerning,” said Ormsby, who chairs the House Appropriations Committee.

But the lawmakers made no promise of urgent action.

“They asked for an emergency appropriation and we don’t have the ability to do that,” said Rolfes, the chair of the Senate Ways and Means Committee. The Legislature adjourned in late April and, barring a special session, won’t reconvene until January.

Rolfes said lawmakers are “acutely aware” of nursing home closures. She contacted the governor’s office after receiving the letter. In an email, a spokesperson for Gov. Jay Inslee said DSHS is “convening meetings” with the industry and others “to discuss both the nursing home daily rate and staffing requirements.”

Under current Washington law, nursing homes are the only Medicaid payees whose rates are automatically reviewed every two years. The next “rebasing” is scheduled for July 2020. While the industry unsuccessfully lobbied to move that review up, lawmakers did include $50.8 million for higher nursing home rates beginning next year. Combined with federal matching funds, DSHS said that will raise the average daily Medicaid rate from $216 to $251, a 16 percent increase.

But Robin Dale, the president CEO of WHCA, says the industry can’t wait. “Our fear, as we already know, is that some facilities can’t make it that far,” Dale said.

Always ‘Going Broke’

Despite the upheaval, not everyone thinks the disruption in Washington’s nursing home industry is a crisis that requires immediate adjustments to Medicaid reimbursements.

Democratic state Rep. Eileen Cody is the longtime chair of the House Health Care and Wellness Committee who has worked on nursing home funding issues for more than two decades.

“I will tell you, the history is they always want more money,” Cody said. “They always say they’re going broke.”

Entire wings at the Keiro Northwest Rehabilitation and Care Center in Seattle have closed as the facility prepares to shutter operations after more than 40 years. CREDIT AUSTIN JENKINS/N3

In 2015, Cody noted, the Legislature overhauled and simplified the nursing home reimbursement system with support from the industry.

At the same time, lawmakers mandated a minimum of 3.4 hours of direct care per day, per resident and required that large facilities have a registered nurse on site at all times. Further changes to the nursing home payment system were implemented in 2016, based on recommendations from a nursing home work group created by the Legislature.

From Cody’s perspective, the struggles facing nursing homes are partly a reflection of Washington’s strong community-based system for long-term care, including adult family homes and in-home care, which the AARP ranked No. 1 in the nation in 2017.

A declining number of nursing home beds is “what we wanted as a Legislature,” Cody said. “As a baby boomer, I don’t want to go into a nursing home and nor does anyone else.”

Still, she acknowledges closure of Keiro Northwest’s nursing home is unfortunate, because of the community it serves.

Overall, Cody says she’s not worried about the closures at this time. “It’s certainly something that we are going to pay attention to, but I don’t think it’s a crisis,” she said.

Toby Edelman is another skeptic of the industry’s emergency declarations. She’s a senior policy attorney with the Center for Medicare Advocacy, a patient advocacy group in Washington, D.C.

In April, Edelman published an article titled “What’s Causing Nursing Home Closures?” In it, she points to research that identifies multiple factors, other than Medicaid rates, that can result in a nursing home closing: the size of the facility, its occupancy rate, the number of care deficiencies and whether it was part of a chain.

“Yes, Medicaid rates may be a factor in some nursing home closures,” Edelman wrote. “But to claim that closures are a new issue and that Medicaid rates are the cause of closures is too simplistic – and not true.”

In an interview, Edelman said nursing home closures are not good for residents, but she also said that not all closures are equal.

“If the facility has a lot of deficiencies and is providing really poor care to residents, then that’s less of a concern than if it’s really providing very, very good care or serving a community that really needs to be served,” Edelman said.

In April, Edelman’s organization issued a joint statement — separate from her article — with other long-term care advocacy groups, urging policymakers to focus instead on nursing home accountability.

“Before considering giving nursing homes more taxpayer dollars, let’s first improve oversight of how nursing homes use funds currently allocated for resident care and increase enforcement of the nursing home standards of care,” the statement said.

Long-Term Outlook

The recent closures come at a crossroads moment for the nursing home industry in Washington.

Over the past 20 years, the number of Medicaid clients in Washington nursing homes has dropped from 16,000 to the current 9,700, even as the percentage of people 65 and older has increased, according to DSHS.

Additionally, since 2014, the average occupancy rate of nursing homes in Washington has fallen from 82 percent to 78 percent. Two decades ago, nursing homes cared for 10 percent of the 79 and older population. Today, it’s less than six percent.

One key driver in these downward trends has been an increase in community-based alternatives to nursing homes.

However, as the baby boomers age, the number of residents 79 and older in Washington is expected to more than double by 2035. As a result, the nursing home industry projects the state will need to double the number of nursing home beds.

“The loss of 15 or 16 skilled nursing facilities in the last two years, with more on the way, could present a problem for the aging population in the next few years,” said Dale, of the WHCA.

So far though, DSHS officials don’t share that concern; officials have identified 34,346 beds in the community that are comparable to nursing home beds.

Still, for Keith Akada, worry is constant these days. Since getting the news of Keiro Northwest’s closure, he’s called more than 30 nursing homes and adult family homes on his mother’s behalf.

He said several of the latter lost interest as soon as they found out his mother is on Medicaid — and what the state will pay each day.

“You only want what’s best for your mom, so it’s hard,” Akada said, fighting back tears.