Slomo Rechnitz submitted a plan to the State of California to close 3 of his 5 buildings in the county — effectively wiping out 60% of the available beds in Humbolt County.
By Steve Moran
Slomo Rechniz controls 1 of every 14 skilled nursing beds in the state of California. He has been both the buyer of last resort for “in trouble” nursing homes and clobbered over and over again in the press for providing terrible care.
Humboldt County Disaster
He controls 5 of the 6 nursing homes in Humboldt County. A county with about 135,000 people that sits in the far northwest corner of California. It is tough to get to and is mostly known for lumber, fishing and marijuana.
The 5 nursing homes that Rechnitz owns represents 98% of all the licensed beds in the county. He has submitted a plan to the State of California to close 3 of his 5 buildings in the county — effectively wiping out 60% (258 licensed beds and 190 residents) of the available beds. According to the Sacramento Bee, the reason for the closing is the lack of adequate available staffing resources, which has forced him to import temporary workers at great expense. They claim to have lost $5 million over the last 18 months across the 5 facilities.
According to the article there is a huge outcry from the community, including the claim that the loss of $5 million is not true.
The final important piece of the equation is that apparently Rechnitz is willing to hand over operation of the facilities to anyone who wants them . . . for free. So far he has no takers.
A number of community members are calling for the state to step-in and take control of the buildings, something apparently Rechnitz would be fine with (maybe even delighted with).
I would also acknowledge it is entirely possible there are undercurrents that were not disclosed in the article. One hint of this is that the National Union of Healthcare Workers has disputed the $5 million loss.
While there has been substantial negative press about Rechnitz operations in the past — in other parts of the state — this article didn’t mention any substandard care. The fact that they are willing to import workers and pay their wages and temporary housing costs suggests they are doing the right thing. But it seems unreasonable to force them to keep operating at a loss.
There seem to be two obvious issues:
190 residents to be moved vs. 258 beds means an occupancy rate in those three facilities of less than 75%. It is very very tough to operate a mostly MediCal (Medicaid) building at that occupancy. While I continue to hear experts suggest we are going to need more nursing home beds as the boomers age, don’t bet on it.
There are so many reasons why this won’t happen. Assisted living is less expensive and, when push comes to shove, the government will jump into paying for assisted living in a big way. (In some states it is already happening big time through waiver programs).
The second reason it won’t happen is that boomers will want to die very differently than the prior two generations. We boomers don’t want to be the living dead; where there is no cognitive function, while bodies are being kept alive with tubes in and out.
The states — all of them, not just California — along with the Federal government just keep squeezing on reimbursements. If they want to keep these facilities open, then they should step in and pay enough money to the operators so that they can not only break even but make a profit.
I predict the state will step in and take over ownership, at which time they will invite all union workers and massively jump the compensation to everyone in the building. It will likely end up costing the state way more money than if they paid a fair rate to the existing operator.
I think we will see more of these stories coming to light.
A Big Surprise
The last thing is that the citizens of Humboldt County might be in for a big surprise . . . maybe if this capacity goes away they will discover they have just the right number of beds.
Don’t get me wrong. This is a huge tragedy for the residents who will be moved and their families. Perhaps the right thing to do would be to get creative, allow one or two buildings to close or stage the closures, with the state figuring out how to keep the others open.
Stay tuned . . .