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 On The Road: LTC Providers A Steadying Force In Michigan Economy

Heavy industry makes way for health care sector, including long term care.

 Senior Editor

Blaney Park in Michigan's Upper Peninsula
Michigan’s economy has shown signs of life in recent months, and the second Provider On the Road article examines how the stability offered by long term care providers has not only helped lay the foundation for an economic rebound, but prompted skilled nursing and assisted living owners to change the way they do business.

Nursing Care A Bedrock In Challenged Economy

A large part of Michigan’s problems relate to the well-documented shrinking of the automaking sector, forcing closures of once-thriving factories and ancillary businesses tied to the Big Three.
 
While manufacturing has retrenched, health care jobs, including long term care, have become even more important, notably to small and medium-size communities, says Charles Ballard, economics professor and author at Michigan State University. “It’s absolutely true [about the emergence of long term care in the economy]. We had such a bad decade in terms of the economy and employment. From the peak of employment in the summer of 2000 to the end of 2010, there was an 850,000 net job loss,” he says. “There were very few bright spots, except for the fact that health care grew in the state, and part of this is long term care facilities.”
 
Gail Clarkson, chief executive officer (CEO) of Washington, Mich.-based MediLodge Group, says some of her 15 skilled nursing facilities and one assisted living facility (all in Michigan) are the largest employers in the counties in which they reside. Gail Clarkson
 
All told, MediLodge employs 3,000 and operates 2,500 beds, with clusters of facilities near its Detroit-area headquarters and others spread across the state’s Lower Peninsula, with MediLodge of Hillman in the northern reaches and MediLodge of Howell and MediLodge of Montrose closer to Michigan’s midsection west of Detroit.
 
“The state’s downturn has seen additional skilled individuals available for us to employ, but the negative side is that people are putting off health care more and leaving themselves in a more vulnerable position,” Clarkson says. Indeed, the biggest change in care for her facilities is the fact people are coming to MediLodge either “very young,” around 65 to 75 and in need of short-term rehabilitation, or very old, above 85 and suffering severe illnesses like end-stage dementia.
 Modern public areas at MediLodge
Medicaid Funding Message Vital To Providers
As in all states, the ability of providers to employ workers and create dozens of related jobs through vendors and contracted work relies on government funding of the Medicaid and Medicare programs.
 
In Michigan, new Gov. Rick Snyder (R) has unveiled a sweeping reorganization, aimed at decreasing regulation and increasing business opportunity. His first budget for fiscal year 2012 did not cut the Medicaid program, a fact David LaLumia, president and CEO of the Health Care Association of Michigan (HCAM), says is very good news. “Despite the bad economy we are cautiously optimistic,” he says. “Our message has made sense to people. Medicaid as a safety net is valuable to people throughout Michigan.”
 
Echoing Ballard, LaLumia sees nursing facilities as a great place for good jobs and good salaries and benefits. Besides advocating to the new governor and administration, he has seen support from a range of Michigan’s federal delegation to Congress, specifically noting the understanding of the long term care issue by Sen. Debbie Stabenow (D) and Reps. Dave Camp (R) and Fred Upton (R).
 MediLodge's Millford, Mich., facility after remodel
On the economic forecasting front, Ballard expects long term care to continue to be a leader in the Michigan economy, considering the aging population and other trends. As for the general economy in Michigan, he notes, “Maybe the worst is behind us.”
 
Ciena Offers Care And Jobs
Ciena Healthcare is a major player in the nursing care business and Michigan economy, running 32 skilled nursing communities across Michigan (with four in Connecticut). Founded in 1998 by Mohammad Qazi and based in Southfield, Mich., near Detroit, Ciena employs around 4,500 people in the state, with 3,970 licensed beds.
 
It is the largest privately owned manager and operator of skilled nursing and rehabilitation facilities in Michigan, and Qazi says the intention is to keep it that way. “Our focus is on building some new buildings and replacing the old ones,” he says, stressing the push in his properties for more private rooms and amenities for a new baby boomer generation that is just now beginning to require rehabilitative nursing care.
 
“It’s been challenging here, times are tough. We are very fortunate to create a significant number of jobs, but it is starting to turn around in Michigan. Automakers are making great products, and they are doing substantially better. There is a new governor here, he has a strong background as a CEO, and expectations are high,” Qazi says.
 Mohammad Qazi
Of the thousands he employs, there is now a lot more specialization at all levels of the care spectrum. “Nurses, social workers, dietitians … all of these jobs are focused in terms of rehospitalizations; that’s a big problem when elderly have to go back within 30 days—it is traumatic for them and costly to the system,” he says.
 

Mid Michigan’s Schnepp Center In Its 53rd Year

For 32 years, the Prestage family has owned and operated the Schnepp Health Care Center in St. Louis, Mich., starting in 1978 when Lois and Richard Prestage, Sr., purchased the facility from Richard Schnepp. In 2002, Richard Prestage and his wife, Carol, bought the center from his parents and run the business today.
Private room at MediLodge
Located smack in the middle of Michigan, the Schnepp center has grown over the years to employ 138 people in nursing and rehabilitative care. A rural community, Schnepp has 101 licensed beds and averaged about 94 residents last year.
 
Big changes have occurred over the years, but Richard Prestage says the most distinct is the fact that “people stay home longer before coming for care and come to us later, with more significant health problems.” The weak economy has played an even greater role of late in how and if people come for care.
 
“We’ve seen several times over the last year grandkids who have moved in to take over care of a grandma or grandpa,” Prestage says, reflecting the weak job market for the younger generation who may no longer be able to afford to live on their own and subsequently the lack of money for the older generation to seek 24/7 nursing care.
 

Medicaid The Primary Payer

The biggest taxpayer in its community, Prestage says his Schnepp center relies heavily on the ability of its residents to use Medicaid funds for paying the bills. “Medicaid is around 65 to 70 percent of our business. We don’t make any money on [Medicaid] as it is, so it would be devastating to us with any cuts,” he says.
 
Many of his workers have been around a long time, with one housekeeper on duty for three decades. “We pay very well and offer good benefits and health insurance. These are not minimum wage jobs,” Prestage says.
 
Despite the challenges of the Michigan economy, Prestage has pushed the Schnepp name into the new era of person-centered care, notably by just completing a $1.6 million renovation project to revamp dining rooms and add enlarged physical therapy rooms, among other improvements.
 
Assisted And Skilled Nursing Adapt In Western Michigan
West Woods of Niles in Niles, Mich., is much closer to a famed Indiana institution, Notre Dame, than to its own state’s famous college towns of Ann Arbor or East Lansing, sitting only four miles north of the home of the Fighting Irish.
 West Wood of Niles throws a party

At West Woods, a Peplinski Group-owned 121-bed skilled nursing facility, Chad Culver is the administrator. He is highly concerned about how Medicaid fares in the state, noting his 175-person staff won’t be able to count on wage increases or possibly face job cuts if budgets are trimmed.
 
“It would present real hardship for the facility because 70 percent of our residents rely on [Medicaid] for nursing care,” Culver says. Like HCAM’s LaLumia, he says the long term care sector is cautiously optimistic reductions are not coming. “So far we have been very fortunate, even with a new governor, who doesn’t plan on making cuts,” Culver says.
 
Not far from West Woods sits an assisted and independent living complex called Woodland Terrace of Longmeadow, also in Niles. Owned by the Dockerty family, as is the Woodland Terrace Bridgman closer to Lake Michigan, the facility has 60 units and just celebrated its first anniversary this past February. Half of the units are set aside for those with special needs, like mild to moderate dementia/Alzheimer’s, and for those with more extensive physical needs, reflecting the various levels of care residents can access.
 New addition at West Woods of Niles
The campus has a just-opened feel to it, and a piano player, as well as staff, greets visitors. Todd Dockerty, chief operating officer, says the business attracts new residents through open houses, free health screenings, and by making visits to doctor offices. Business has been good at the two facilities, and Dockerty is hopeful for the state’s reversal of fortunes. “It’s all very wait and see,” he says.
 
The motto now in Michigan may be just that: Wait and see. For providers of long term care, however, it’s modernization and adaptation for the opportunities that await and advocacy to ensure adequate reimbursement streams in the years to come.
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