The nursing home operated by Alaris Health on John F. Kennedy Boulevard in Guttenberg was old. Built long before there was any concerns about isolating large numbers of residents to stop a virus that could spread like wildfire, it was small and had as many as four to a room.
And now it is closed.
The long-running coronavirus pandemic took the lives of more than 7,800 long-term care residents in New Jersey.
It also has had a big impact on nursing homes.
Since March 2020, three nursing facilities in the state have shut down, state data shows, underscoring not only changes that COVID brought to standards of care, say experts, but also a growing financial instability in the industry nationwide. In each of the two previous years before the deadly virus struck, there was only one nursing home closure in New Jersey, according to the state Department of Health.
“The COVID-19 pandemic has placed increased financial pressures on nursing homes and assisted living providers who already operate at very slim margins,” said James McCracken, president and CEO of LeadingAge New Jersey, the statewide association of not-for-profit senior care organizations.
Nationwide, industry officials predict long-term care providers could lose $94 billion over the course of the pandemic, and warn that more than 1,800 facilities could ultimately close their doors.
The closures in New Jersey, meanwhile, also suggest that the financial pressures felt by long-term care facilities because of COVID may have left nonprofit operators such as those represented by LeadingAge especially vulnerable.
Medicaid, a joint federal and state program that helps pay for nursing home costs, serves as a safety net for those with limited income and resources. But the rate of reimbursement in New Jersey remains far too low, critics complain. At the same time, not all for-profit nursing homes will accept Medicaid, or may limit the services and beds provided to Medicaid patients — unlike nonprofits.
“Faith-based, mission driven organizations are particularly affected as they traditionally care for those in need regardless of their ability to pay,” said McCracken of the financial crisis caused by the pandemic.
One of the facilities that closed in the state this year — Armenian Nursing & Rehabilitation Center in Emerson — was operated as a nonprofit. The Villa at Florham Park, an assisted living residence and also a nonprofit, is shutting down as well. The facility, which has already relocated all its residents, has submitted a closure plan to the state, according to a Health Department spokeswoman.
More recently, St. Francis Residential Community in Denville, a nonprofit independent living facility for seniors operated by The Sisters of the Sorrowful Mother, also said it was closing for financial reasons, although it did not link its troubles to COVID. The shutdown will displace 75 people who live there, including 10 nuns from another order, the Missionary Sisters of the Immaculate Conception of the Mother of God. They did not respond to requests for comment.
The Sisters of the Sorrowful Mother, which has owned the property since 1895, said in a statement that as the buildings and the campus infrastructure have aged, “it has become increasingly difficult to fund the maintenance and needed renovations to sustain the financial viability of the community.”
While they have yet to file a notice of intent regarding the closure with the Department of Community Affairs, which licenses the facility, they retained Wall Township-based Springpoint, a nonprofit organization that operates 27 senior living facilities, to assist in the shutdown and find suitable housing for current residents.
A Springpoint spokeswoman said they have created a limited number of rental agreements at one of their facilities, The Oaks at Denville, that will be offered to St. Francis residents and to the Sisters living there, based on financial need.
McCracken said a more robust reimbursement system is needed to support providers who care for the most vulnerable.
“Nonprofit providers are resident focused and I’m saddened when faith-based organizations close because they cannot afford to continue their ministries,” he said.
His concern was echoed by Laurie Facciarossa Brewer, the New Jersey Long-Term Care Ombudsman, who wonders if faith-based facilities and other nonprofits are having a more difficult time riding out the effects of the COVID-19 public health emergency, including reduced occupancy rates.
“At least one national study has shown that nonprofit long-term care facilities were more effective in controlling COVID-19 infections,” she said. “This may suggest that these facilities had better staffing ratios and provided more nursing hours, a key indicator of quality in a long-term care facility and the single most important tool for combatting the spread of infection.”
Losing such organizations, Facciarossa Brewer said, “is bad news for people requiring nursing home care in New Jersey.”
Andrew Aronson, president and CEO of the Health Care Association of New Jersey, which represents the state’s long-term care facilities, said the pandemic induced an economic crisis the pandemic upon all long-term care providers, “regardless of ownership structure.”
Nationwide, a recent survey by The American Health Care Association and National Center for Assisted Living, representing more than 14,000 nursing homes, assisted living communities, and other long term care facilities across the country, found that most nursing homes and nearly half of all assisted living communities are now operating at a loss.
That survey said only a quarter of nursing homes and assisted living communities were confident they can last a year or more, citing increased expenses or lost revenues. There are also fewer residents.
“Even though COVID cases in long term care are at historic lows, providers are struggling to recover from the economic crisis the pandemic has induced,” said Mark Parkinson, president and CEO of the association. “Too many facilities are operating under shoestring budgets simply because policymakers have failed to dedicate the proper resources, and this can have devastating consequences.”
To ensure the stability of the long-term care industry, Aronson said lawmakers and public officials must provide short-term economic support and address the chronic underfunding of Medicaid, which only covers about 70% of the cost of a patient’s nursing home care
The issue, though, goes beyond Medicaid funding.
The demands of isolating sick and infected residents in nursing homes that were never designed to contain a virus like COVID demonstrated the inadequacies of many older facilities that may no longer be economically viable.
Alaris Health’s nursing home in Guttenberg, which cared for nearly 100 residents, was a relatively small facility. Licensed for 108 beds, it had been averaging 91 residents during the pandemic. But the nursing home, built in the 1960s, was also in need of modernization. Many of its rooms were configured for as many as three-and four-people, and officials there said it was hard to isolate patients with COVID-19.
Even before the pandemic, the nursing facility had ongoing labor issues and union officials complained their members had been working under an expired contract, with many who had been sickened on the job by the coronavirus later finding themselves responsible for thousands in medical bills. Its operators also had once considered a plan to demolish the facility and replace it with a 15-story residential building with views of the Manhattan skyline.
In the wake of the pandemic, Alaris Health announced last year it would close the nursing home and began moving out residents to other facilities. According to the…