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Family-owned SNFs: Can they survive?

February 29, 2012
by Richard L. Peck, Contributing Editor
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Is today’s regulatory and economic environment sounding the death knell of family SNF ownership?

Ten years ago one of the 12 Bortz family-owned nursing home facilities in Michigan won this magazine’s annual OPTIMA Award for an activities program protecting residents from dementia-related “sundowning” (the disruptive burst of energy residents can experience in the early evening hours). At the award ceremony held at the facility, Donald “Jim” Bortz III, was immediately swamped by residents wanting to talk with him and shake his hand. If ever there was a “rock star” reception for someone in long-term care, it happened that day—my only such experience in my (then) 11 years of editing the magazine.

After the ceremony I asked Bortz for his thoughts on owning and operating nursing facilities. His grandfather Donald Bortz had founded the organization in 1958 and his father D.J. Bortz, Jr. had subsequently grown the company. Bortz said he missed the days when he, his father and grandfather would sit on a veranda and talk with the residents. “I’d still like to do that but they’re [the residents] so much sicker now.”

It was emblematic of the evolution nursing homes have experienced over the years. Caregiving challenges have grown to the point that many nursing facilities are wondering whether they will have the resources to meet them. And in no sector of long-term care is that concern more profound and poignant than in the family-owned facility. These providers face ever-growing regulatory red tape and competition from deep-pocketed chains, as well as reimbursement challenges of unprecedented scope. Their challenges are the same as those confronted by corporate chain organizations, but family-owned facilities don’t command the same organizational depth or resources. Can and will they survive?

Recently I visited with heads of several family-owned organizations and asked how they were faring these days. The results were both rewarding and worrisome.

GROWING UP IN LONG-TERM CARE

Take, for example, Kelley C. Rice-Schild, whose great-grandmother Florence Dean opened Floridean Rest Home (Today, The Floridean Nursing and Rehabilitation Center) in Miami in 1944. Her story touches on every aspect of the “family-owned” saga. Rice-Schild grew up learning about and volunteering in the family business managed by her grandfather Jack Rice, Sr., which eventually grew to 60 beds, and helped her grandmother Julia Rice and father Frank Rice manage the nursing home until becoming administrator in 1997. Responding to an increasing demand for post-acute services, she has been “staying ahead of the curve” on Medicare ever since, adding a 30-bed Medicare-only unit two years ago. Today her resident population is 60 percent Medicare, with the rest evenly divided between private-pay and Medicaid.

Rice-Schild finds herself gearing up for more business adventures. On the horizon are the accountable care organizations, participation in her area’s Regional Health Information Organization and the imminent start of Medicaid managed care in Florida. For the new Medicare requirement to help hospitals reduce their re-hospitalization rates, Rice-Schild plans to hire an advanced nurse practitioner to oversee that effort. Whether her company succeeds in all this is pretty much her own personal responsibility.

Floridean Rest Home, 1944

Through it all, Rice-Schild maintains that the long-time family connection is a definite advantage for her facility and for the community. “We get calls at least once a week from someone who knew my family or whose mother had stayed here at one time or another. They often call me directly because they’re going through a traumatic time trying to manage a long-term care crisis in the family and I help them any way I can, whether they come here or not.”

Bob Van Dyk, owner of Van Dyk Health Care in Ridgewood, N.J., and immediate past-chair of the American Health Care Association (AHCA), offers a similar story. His company was founded as the family business in 1953. “My dad was a nurse and handled the nursing,” Van Dyk says. “My grandfather was a butcher and my grandmother did all the cooking, so that was food service, and my mom was the bookkeeper. I was a baby and served as the activities program—residents played with me and helped raise me. I remember that after church we’d go to the facility for Sunday dinner, and spent every Sunday and every holiday there. I worked at virtually every level of the facility, including nurse’s aide, when I was growing up.”

Ann Briody Petock is the third generation of her family to oversee the Briody Health Care System in Lockport, N.Y., now in its 65th year of operation. Starting in a conventional two-story home, Briody became a freestanding 82-bed facility in 1971.

And Ian Cordes, a nationally known LTC expert who has managed professional organizations for medical directors, directors of nursing and directors of social services in Florida, got his start as a dishwasher in his father’s assisted living facility in 1971. Having sold the family business in the mid-1980s, Cordes says he still retains his licenses in “the profession I love.”

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