When a nursing home closes.

Many small independent homes are going to be left behind, the experts say. Here's what happens.

There's no getting around it: competition from home health agencies and assisted living programs that keep people in their homes longer may be forcing "marginal" nursing homes out of the market. In fact, this is already happening. Rural nursing homes are closing and moving to larger population areas where they are likely to be more fully used. This makes "business sense." Economically and in other ways, though, it is a different story.

In some small communities, nursing homes may be the largest employer, contributing as much as $500,000 annually to the local economy through wages, taxes and use of local vendors and services. For example, annual payroll alone amounts to more than $450,000, according to budget figures from one rural Texas nursing home, where the staff-patient ratio is 1:1. In a 60-bed home, that's 60 employees, whose incomes create a ripple effect throughout the local economy - for groceries, housing, taxes, etc. The company also uses local vendors for more than $45,000 worth of goods and services each year. When the nursing home's property taxes and other expenses are added, loss of the facility creates a powerful economic impact.

Thus, when a nursing home closes a small town loses more than the opportunity for families to be close to loved ones who need skilled nursing care, it can also lose a half million dollars from its revenue base. That may be as devastating to the community as the move may be for the home's residents - and that, in itself, is devastating enough.

It is commonly found that the mortality rate is higher for residents transferred to different buildings. That may be caused by stress from being in a new environment, having different routines and strange caregivers, and having to build relationships with a new team of professionals and paraprofessionals. "Cognitive levels decrease more than the physical levels when the elderly are moved to a strange environment," says Jan Knapp, nursing home coordinator for the Hospice of Galveston County, Texas. "They just don't function as well."

She sees this often in discharge planning for nursing home patients who have been hospitalized for a brief time. At the hospital, she assesses their physical and mental condition on a scale of 1-10. "Usually they rate a three or four in the hospital. They're not eating, not communicating and not interacting. There's no verbal output. Back in the nursing home a couple of weeks later, after they have spent a while in a familiar environment with familiar faces, they're back to normal. This is because the patients are around people who love them and take care of them."

When a nursing home closes and patients are moved to new environments, though, that recovery period takes much longer, since they never return to that totally familiar situation. There is a nursing home in another small town in Texas that is in the process of closing, with five other care centers located in the same county preparing to take on the displaced residents and some of the employees. Even that doesn't make the transition any easier for the residents, especially those who have lived in the closing home since it opened more than 15 years ago. They may remain unsettled and forgetful, and have difficulty maintaining focus for quite a while, if they recover at all.

The nursing home managers are trying to facilitate the change to make the transition as easy on the patients as possible. Karen Janson, spokeswoman for the closing home, notes, "All the nursing homes in the region rallied and helped with the discharge planning. Everything is being done through those area nursing facilities. The staffs counseled the patients and became familiar to them before the move. The rooms were decorated with the belongings that the patients took with them." Families also were encouraged to visit more often - before and after the transfer - to provide continuity from one location to the other.

But this points up another problem: in a rural community with no other nursing homes nearby, the closure is more difficult for the families. Sending a parent or other family member to a nursing home is a difficult decision in the first place. After a family has placed a loved one in a local nursing home, and then it closes - and the nearest alternative is 30 miles away - their stress only increases. It's no longer a matter of swinging by to visit Mom on the way home from work or en route to the grocery store. The trip to the more distant nursing home is a trek, which means visits are less frequent and tension is compounded. That puts pressure on the rest of the family and creates further problems.

One key issue that has affected the decision to locate nursing homes in rural areas in the first place is availability of trained personnel, including registered nurses, licensed vocational nurses and licensed nursing home administrators. Having the skilled health care professionals live in or near a community indeed attracts a long-term care center, because it does not need to recruit far and wide to fill those positions.

If the nursing home closes, those skilled personnel may have to travel farther to find work. Good nursing home employees displaced by a closing facility usually have few problems finding jobs at other nursing homes. Word travels fast about good employees, because skilled care facilities don't exactly have waiting lists of qualified workers. But their dilemma is similar to that of the families. Do they want to drive that far, or can they find another alternative?

The five nursing homes in one county mentioned earlier are eager to hire many of the former employees of their closing counterpart. But the administrators and managers are redundant, so at the very least, the community is losing their higher salaries and technical expertise.

In a small town without those other nursing facilities to take up the slack, the community loses not only managers, but possibly other essential health care services, e.g., the physical, occupational, recreational and pulmonary therapists, medical laboratories and radiology services that are associated with the nursing home.

Our 3927 Foundation has contracts with therapists who care for the nursing home residents and who are available for outpatient visits through a local clinic. If it weren't for our nursing home, those therapists wouldn't come to town. Even home health agencies are not likely to have licensed therapists to provide this type of care. The therapists don't want to travel those distances, and they don't need to because they are in such demand.

Outlying areas often have clinics to provide local patient services because they have a resident base in the nursing home. The money generated by payments from Medicare and Medicaid helps them be profitable enough to serve the rest of the community. Clinics in the Texas towns served by our company depend on the resident population of care centers. Each town may have only one physician. If a nursing home were to close, it's a reasonable expectation that the neighborhood clinic would suffer financially, since it would have only the local citizens to serve. Over a period of time, the clinic could shut down, and the whole community would be without convenient health care services.

There's no question that the trend toward related services - subacute care, outpatient services, affiliations with clinics and small rural hospitals - addresses potential financial dilemmas caused by nursing homes' heavy reliance on Medicare and Medicaid income. But there's no easy answer when nursing homes face these difficulties, particularly for those in rural communities. More often, troubled nursing homes are sold, rather than closed, but the change of owners often affects patients negatively, and still causes an economic ripple in the community. It's not quite as devastating as total closure, but it still creates problems worth being concerned about. These should always be kept in the forefront of our planning for the future.

John Mills is assistant director of 3927 Foundation/Grace Ponds Care Centers, which manages 13 nursing homes in urban and rural communities in Texas. He has been a nursing home administrator since 1989.