Report: Nursing Home Closures in Iowa Exemplify General Pattern

Nursing home closures are not unusual.[1] As the Center for Medicare Advocacy reported in July 2022, a 2009 study found that 8% of nursing facilities in operation in 1999 had closed during the next six years. Facilities were more likely to close if they provided poor quality care, had low occupancy, and had a small number of beds or were hospital-based. Medicaid rates were only one of many factors. Nursing home closures have also reflected older people’s general preference to remain home as long as possible, an increasing possibility in recent years as home and community-based options have become more widely available. Some states have also implemented policies of deliberately closing nursing facilities, particularly those that provide poor care and have low occupancy over a long period of time, as they seek to shift spending to home and community-based options.

A 2020 report by LeadingAge, the trade association of not-for-profit providers, described 555 nursing home closures between 2015 and June 2019.[2] Nine states[3] accounted for more than half the closures and in three states,[4] closures were concentrated in rural areas. LeadingAge recognized that closures may reflect deliberate choices of older people to choose care in their own homes:

The closure of nursing homes over the last four years may be reflective of market trends given the current population of older adults. With changes and increased availability of HCBS, older adults who may have otherwise gone to nursing homes are staying home. In addition, there is some indication from survey research that older adults prefer to live in their own homes and communities, particularly when they do not face a physical or cognitive impairment.[5]

Closures Today

Iowa Health Care Association CEO Brent Willett identified 17 nursing facilities in Iowa that closed in 2022, reflecting 22% of all nursing home closures in the United States last year. All but two of the facilities were in rural communities.[6] State and national nursing home trade associations blame closures on COVID-19, facilities’ inability to hire staff, and what they claim is insufficient Medicaid reimbursement.[7] However, in the context of closures that occurred historically, what do recent closures mean? Are they similar or different from closures that have occurred in the past?

This report looks at the 17 Iowa facilities that closed, according to the Iowa nursing home trade association. It first examines Care Compare to see what, if any, information remains about these facilities. Next, it cites contemporaneous newspaper articles about the Iowa facilities that announced they were closing in 2022.

What Care Compare and these articles document is that closures are occurring now for many of the same reasons as before – poor quality of care, low occupancy, and small facility size. While COVID-19, staffing challenges, and reimbursement are concerns, they are cannot take full blame for the recent facility closures in Iowa.

Care Compare Information on Iowa Closures

Nine of the 17 facilities – Patty Elwood Center, Good Sam in Fontanell, Westmont Care Center, ABCM Rehabilitation Centers East Campus, Sunnycrest Nursing Center, Dumont Wellness Center, Grinnell Health Care Center, Touchstone Health Care Center, and Morningside Care Center[8] – were displayed on Care Compare, as ofFebruary 7, 2023.

With one exception (Touchstone Health Care Community (Sioux City)), the facilities have a relatively small number of certified beds, ranging from 24 to 85 and averaging 52.125 beds each. As a result of the small number of beds in closed facilities, the number of nursing home beds actually removed from Iowa’s supply of beds as a result of the closures may be far smaller than the number of closed facilities would suggest.

Occupancy rates at the Iowa nursing facilities that closed in 2022 were often low. Greene County Medical Center had 34 residents in its 85 certified beds; Sunnycrest Nursing Center had 25 residents in its 50 certified beds.

Eight of the nine facilities had civil money penalties imposed, ranging from $650 to a total of $251,503. It is not possible to know if the fines imposed against these eight facilities were unusual or typical in Iowa and what the average fine in Iowa is, since the federal website Care Compare does not report comparative information about fines at either the state or federal level, Nevertheless, knowing that most facilities are not fined (since fines are typically limited to deficiencies cited as actual harm or immediate jeopardy, classifications applied to 5-6% of all deficiencies), it is reasonable to infer that the Iowa facilities that closed may have had problems in the quality of care they provided.

Newspaper Articles on the Closures in Iowa

Touchstone Health Care Community in Sioux City had been a Special Focus Facility for 44 months through July 2021. It was unable to continue in operation after meeting its July 14, 2022 payroll, leading the Iowa Department of Inspections and Appeals to get a receiver.[9] Since January 2019, the facility had been cited with 106 regulatory violations, federal fines of $195,000 had been imposed, and it was sued by multiple vendors for more than half a million dollars and by its management company for not paying management fees.[10]

Sunnycrest Nursing Center and QHC Humboldt South are both nursing facilities in QHC, an Iowa chain of eight nursing facilities and two assisted living facilities. QHC filed for bankruptcy in December 2021. It told the court hearing its bankruptcy case that Cedar Healthgroup would pay $12.1 million for the chain, but the sale fell apart. QHC told the court it would close three of its nursing facilities, including Sunnycrest and Humboldt South, describing the Humboldt South facility as having “‘a floor issue’ . . . that could put the home’s eight residents at risk.” Attorneys for the federal government expressed concern about the 53 residents in the three QHC facilities that were closing. They also said that the chain owed $2.1 million for penalties for regulatory violations and had to pay back the Accelerated and Advanced Payments it had received during the pandemic.[11] QHC owed the state of Iowa $3,930,784 in unpaid state fees.[12]

The Evangelical Lutheran Good Samaritan Society (Good Sam) has been closing and consolidating nursing facilities, including moving residents from Good Sam in Postville to Good Sam in Waukon, 18 miles north of Postville.[13] Good Sam also consolidated Good Sam Newell with nearby facilities.[14] The City of Mott, Iowa, with 685 residents, formed a community group to come up with a plan to provide care at the Good Sam facility, but Sanford Health, which took over Good Sam in 2019, said it was closing the facility on July 22 “and putting the building up for sale with a stipulation that it can’t be used for rendering health care services of any kind moving forward.”[15]

In sharp contrast to the other Iowa nursing facilities that closed in 2022, Patty Elwood Center was a dementia-specific care center, with some residents moving in from more than two hours away because of its specialized care. The facility “has been at full occupancy in the last few months after struggling with occupancy through COVID-19”[16] and often had a waiting list for its 24 certified beds. Its closure reflected an issue facing small non-profit rural facilities.

Conclusion

Some nursing homes are closing, but the phenomenon is not new. As in the past, many of the Iowa nursing facilities that closed in 2022 had few certified beds and low occupancy rates and some may have provided poor care, as reflected in the civil money penalties imposed against them. Moreover, it is not clear how many beds (as opposed to facilities) have been lost due to facility closures in Iowa. Patty Elwood Center had a total of only 24 certified beds.

Although the closure of facilities is difficult for their communities, the Iowa nursing home closures seem more like, than different from, the closures that have occurred over the years.

February 2023 – T. Edelman

Appendix A

IOWA NURSING FACILITIES THAT CLOSED IN 2022

(CARE COMPARE DATA, FEB. 7, 2023)

[1] “Nursing Home Closures: Causes and Solutions” (CMA Special Report, Jul. 14, 2022), https://medicareadvocacy.org/wp-content/uploads/2022/07/Special-Report-Nursing-Home-Closures.pdf

[2] LeadingAge, Nursing Home Closures and Trends June 2015-June 2019 (Feb. 2020), https://leadingage.org/sites/default/files/Nursing%20Home%20Closures%20and%20Trends%202020.pdf

[3] Id. 1, listing California, Illinois, Kansas, Massachusetts < Nebraska, Ohio, Oklahoma, Texas, and Wisconsin

[4] Id. 2, identifying Kansas, Montana, and Nebraska

[5] Id. 13

[6] O. Kay Henderson, “13% of U.S. nursing homes that closed in 2022 were in Iowa,” Radioiowa (Feb. 1, 2022), https://www.radioiowa.com/2023/02/01/13-of-u-s-nursing-homes-that-closed-in-2022-were-in-iowa/

[7] AHCA, “Long Term Care Faces Worst Financial Crisis In Years; Closures Loom Without Additional Funding” (Press Release, Feb. 11, 2021), https://www.ahcancal.org/News-and-Communications/Press-Releases/Pages/Long-Term-Care-Faces-Worst-Financial-Crisis-In-Years;-Closures-Loom-Without-Additional-Funding.aspx; AHCA, “AHCA Releases Report Highlighting Unprecedented Economic Crisis in Nursing Homes; High Operating Costs and Stagnant Recovery Could Mean More Nursing Home Closures, Threatening Access to Care for Seniors” (Press Release, Mar. 2, 2022), https://www.ahcancal.org/News-and-Communications/Press-Releases/Pages/AHCA-Releases-Report-Highlighting-Unprecedented-Economic-Crisis-in-Nursing-Homes.aspx; AHCA, “New Report Highlights Resident Impact of Ongoing Economic Crisis in Nursing Homes; Funding Cuts and Inflation Threaten Access to Care and Health Inequities” (Press Release, May 25, 2022), https://www.ahcancal.org/News-and-Communications/Press-Releases/Pages/New-Report-Highlights-Resident-Impact-of-Ongoing-Economic-Crisis-in-Nursing-Homes.aspx

[8] See chart of the 17 facilities on Care Compare as Appendix A.

[9] Jared McNett, “Sioux City’s Touchstone Healthcare community sees last residents transferred out,” Sioux City Journal (Jul. 23, 2022), https://siouxcityjournal.com/news/sioux-citys-touchstone-healthcare-community-sees-last-residents-transferred-out/article_29186daf-0ed0-59ab-b3fd-7a2368acb29e.html

[10] Clark Kauffman, “Nursing home cited for poor care allegedly owes half a million dollars to vendors,” Iowa Capital Dispatch (Mar. 30, 2022), https://iowacapitaldispatch.com/2022/03/30/nursing-home-cited-for-poor-care-allegedly-owes-half-a-million-dollars-to-vendors/

[11] Clark Kauffman, “Three Iowa nursing homes to close with owner owing taxpayers $2.1 million,” Iowa Capital Dispatch (Jul. 21, 2022), https://iowacapitaldispatch.com/2022/07/21/three-iowa-nursing-homes-to-close-with-owner-owing-taxpayers-2-1-million/

[12] Clark Kauffman, “Dysart nursing home one of three set to close with owner owing taxpayers $2.1 million,” Iowa Capital Dispatch (Jul. 22, 2022), https://www.northtamatelegraph.com/news/local-news/2022/07/22/dysart-nursing-home-one-of-three-set-to-close-with-owner-owing-taxpayers-2-1-million/

[13] Tony Leys, Kaiser Health News, “Small-town nursing homes closing amid staffing crunch,” NBC News (Jan. 22, 2023), https://www.nbcnews.com/health/aging/nursing-homes-small-towns-closing-staff-shortages-rcna66779

[14] Eric Mayer, “UPDATE: Good Samaritan Society closing 3 facilities,” Keoland (May 18, 2022), https://www.keloland.com/news/local-news/good-samaritan-society-closing-lennox-nursing-home/

[15] Jason R. O’Day, “Sanford to close Mott nursing home, refuses city proposal to use facility for senior care,” The Dickinson Press (May 26, 2022), https://www.thedickinsonpress.com/news/sanford-to-close-mott-nursing-home-refuses-city-proposal-to-use-facility-for-senior-care

[16] Kate Klimesh, “Another local nursing facility faces closure,” Driftless Journal (Nov. 23, 2022), https://decorahnewspapers.com/Content/News/News/Article/Another-local-nursing-facility-faces-closure/2/231/58354