A freestanding nursing home tackles diversification.

When Mrs. Smith was making plans for being admitted to a Southwest Texas hospital for "routine" outpatient shoulder surgery, she was expecting the worst. She had received assurances that this procedure would result in little discomfort and that she could expect to be home several hours after the surgery. But with an elderly husband and the common "what if" questions, Mrs. Smith decided to take control of her situation.

In short, this educated health care consumer began planning her own discharge prior to being admitted to the hospital. She visited Valley Grande Manor Nursing and Rehabilitation Center in Weslaco, Texas to ascertain the possibility of staying for a short time to recuperate and rehabilitate in the event that the "routine" surgery was more complicated than anticipated.

These were not the fears of a frantic elderly woman. Rather, they were rational concerns based on the realization that "there is no such thing as routine surgery."

Her fears were substantiated in that there were complications, and what was projected to be an outpatient procedure resulted in an unplanned three-day hospital stay. The hospital discharge planner explained that the DRG limit was two days. If necessary, the hospital would keep her longer, but its costs would not be reimbursed.

Mrs. Smith did not want to be pressured into leaving inpatient care when she didn't feel fit to go home. Because of her pre-surgery research, she was discharged to Valley Grande Manor to receive daily rehabilitation and round-the-clock care for four days. Mrs. Smith was then discharged and resumed her normal life.

This scenario is becoming more and more common, as nursing homes continue to reevaluate their roles. As a result of this trend, Valley Grande Manor, a well-established, 147-bed facility, has gone through major changes. The initial goal was to serve the "Mrs. Smiths" of this world, and its first step was building a full-service rehabilitation center on the nursing home campus. Using therapists in the area, it would provide the full range of physical, occupational and speech/language therapies.

The facility's new role in the local health care system directly benefited the local hospital. Most hospitals need these step-down units both because of Medicare reimbursement policies and because managed care companies strictly regulate the number of days patients can be hospitalized. Our local hospital was no exception -- it was losing considerable money due to unreimbursed stays. In 1993, the hospital had almost 3,200 unreimbursed days for a total loss of approximately $700,000. Unreimbursed days broken down by category were, for example:

* Pre/Postop -- 583 days unreimbursed

* Renal -- 243 days

* Ventilator -- 450 days

* Cardiopulmonary -- 784 days

* Stroke -- 300 days

* Orthopedics -- 315 days

The following categories of illness/rehabilitation were determined to be most appropriate for treatment in this "step-down" nursing home.

* Brain injury

* Medical recovery

* Oncology

* Pre/Postop

* Renal

* Spinal cord 

* Ventilator

* Cardiopulmonary

* Strokes

* Orthopedics

* Wound care

In less than a year, patients at this nursing home have included those recovering from automobile or industrial accidents, strokes, and workers compensation mishaps -- i.e., not the typical, elderly nursing home residents. This shift in care also resulted in the nursing home changing its approach to business. Traditionally, successful nursing homes measured success by daily average census, which was usually affected only when a resident was admitted or died. That has changed at Valley Grande Manor because fiscal success is also measured by patient turnover. In other words, this facility has become an outcome-oriented, results-driven facility.

After several months, the name of the facility was changed to Valley Grande Manor Nursing and Rehabilitation Center to more accurately reflect available services. The term "nursing home" is perceived by the public as a facility that only caters to the needs of the elderly. The new name illustrates to patients, hospital personnel and physicians alike that the facility caters to a much broader base. Today care is rendered to:

* those who are recovering and in need of rehabilitation

following an acute stay at the hospital;

* the terminally ill; and

* those with chronic conditions and cognitive and

functional impairments that will result in them staying in a

nursing home for the rest of their lives.

After opening the on-site rehabilitation center, the administration found it couldn't serve those seeking non-residential rehabilitation programs. Hence, an outpatient rehabilitation center was developed to treat workers, compensation patients, accident victims and others who come in for therapy several times a week. This outpatient center uses the nursing home's inpatient rehab physical, occupational and speech language therapists.

In addition, licensing has been received for the Valley Grande Manor Home Health Services. As with the rehabilitation center, the opportunity for vertical integration of staff was available for home health care as well. Registered nurses or therapists make the initial visit and develop appropriate programs. They make subsequent visits, if necessary. Nurse's aides, as with most home health care agencies, make the majority of visits. Again, the major benefit is that virtually no new support staff or administration have been added to provide this service to area residents.

How is this possible? Valley Grande Manor has been an institution in the southwest Texas area for 30 years. It was clear to administration that the skills developed over the years in caring for the elderly were transferable to people of all ages seeking other levels of care. The available "pool" of experienced employees made it easier to staff related care levels. The challenge, basically, lay in creative staff scheduling. Thus, with virtually no duplication of accounting departments and support staff, the center is operating three additional health care entities.

Services will be further expanded in the local continuum of care by establishing the Valley Grande Manor Rural Healthcare Clinic.

The Federal government has developed criteria for when an area is medically underserved, and many areas of Southwest Texas meet this criteria. (A rural health care clinic is similar to a "country doctor's office" in that minor emergencies and injuries can be treated and then, if necessary, the patient can be referred to a hospital if more acute care is necessary.) The office is staffed by a physician's assistant or nurse practitioner who works under the direction of a physician.

All in all, the gradual growth of this nursing home has produced a wide range of benefits for a variety of groups. The general public benefits because it now has access to a full continuum of care managed by one organization. There are economies of scale in having related health care services available through a single entity. And the profit potential is considerable, in that this new way of operation allows the center to keep patients within a single health care delivery system.

The evolution of Valley Grande Manor Nursing and Rehabilitation Center illustrates the "new" role of nursing homes in today's subacute health care continuum. With creative planning and the efficient use of staff and administration, nursing homes can prosper by offering services to a broad range of patients in a variety of settings. It is a matter of seeing the challenge and meeting it.

Glen Hamel is president of ElderCare Management Services, a Euless, Texas-based firm that owns and manages nursing homes, rehabilitation centers and home health care companies throughout the Southwest.