🔒Masonicare sees opportunity to reposition as pandemic continues to batter nursing home sector

During ordinary times in the nursing home industry, 101 empty beds out of a total of 357 would be a major crisis.

But executives of Masonicare, the Wallingford-based nonprofit conglomerate that runs Masonicare Health Center, see the low occupancy rate it reported on March 1 — which mirrors industrywide trends during the COVID-19 pandemic — as an opportunity.

Masonicare asked the Department of Social Services earlier this year for a permanent reduction in beds at its skilled nursing facility, from 357 to 260, a loss of 97 beds.

If the request is approved, Masonicare will reduce the bed count at its Wallingford nursing home by converting all of the four-person rooms to double rooms – and many of the double rooms to single rooms. Would-be residents want private rooms and more space allows for greater patient safety, said Masonicare President and CEO Jon-Paul Venoit.

“This has been in our strategic plan for quite some time,” Venoit said of the proposed changes. “The pandemic made it a little more achievable and a little quicker.”

Masonicare’s current reduced patient count would allow for the reconfiguration of rooms without creating much disruption or a reduction in staff, he added. The plan also allows the facility to respond to the increasing demand for private rooms from both patients and staff seeking to improve infection-prevention and other safety efforts.

Masonicare’s pivot also reflects an industrywide trend that is shifting care of some of those who are critically ill, recovering from surgery or at the end of life to home- and community-based settings.

Larger trends toward home care

According to state data, occupancy at Connecticut’s nursing homes has hovered around 72% for the past six months, down significantly from an average of 87% in 2019. Part of the reason is that many patients who would once have chosen a nursing home for recovery from illnesses or injuries are opting for at-home care, Venoit said.

The decline in occupancy at nursing homes statewide also mirrors the overall pandemic decline in outpatient surgeries and other procedures at hospitals and other facilities, said Matthew Barrett, president and CEO of the Connecticut Association of Health Care Facilities, a Middletown-based industry group.

“We’re not seeing the kind of activity we’ve seen prior to the pandemic,” Barrett said. “The expectation is that nursing occupancy will recover, the question is how long?”

Nursing homes won’t stay in business for long at current occupancy levels without major help from state and local government, Barrett said.

“Being occupied at 72% is a near-crisis situation; being occupied at that level is not sustainable,” Barrett said. “We will need a bridge of state and federal funding to get to the other side, without it would potentially be a collapse in the sector.”

Home care is not a practical option for many patients who need round-the-clock care from skilled professionals, Barrett added.

The industry shows cyclical patterns of expansion and contraction and may yet rebound with demand from an ever-aging state population, he said.

Although six nursing homes closed permanently in the state in 2020 compared to only one in 2019, six facilities also closed in 2018.

Overall, it is far too soon to say if the still-ongoing pandemic will have permanent impact on how patients choose care, Barrett said. Occupancy rates have been creeping up but the nursing home industry is still reeling from the shock of high infection rates early in the pandemic and the effect on consumer and employee confidence, he added.

Transactions on hold

“Too soon to say” is also the perspective of those on the business side of the nursing home industry who negotiate the terms of mergers, acquisitions and facility closings.

“Everything was put on hold during the pandemic,” said Heather Berchem, partner at Murtha Cullina and chair of the law firm’s long-term care practice group. As conditions have improved in recent months, more transactions that had been frozen are going forward. Attorneys are also seeing some signs of a return to normal as nursing homes make new deals with vendors, she said.

“I don’t think anyone’s had enough time to catch their breath ... they’re worrying about current residents,” Berchem added. “I don’t know that anyone’s making big moves.”

Nursing home executives are seeking legal help for issues like compliance with new pandemic-related state and federal regulations, Berchem said. Multiple bills are pending in the state legislature that would toughen rules on staffing and infection prevention.

“What we’re fearing is the potential flood of new legislation,” Berchem said. Moves to increase staffing are always a concern due to the tight job market for qualified workers and increased costs, she said.

Barrett said his group is working with lawmakers on adding some flexibility to proposed new rules requiring the hiring of infection-prevention specialists to allow smaller facilities to comply more easily.

Filling existing open jobs is the more pressing challenge facing both the nursing home and home-care industries, even as current workers press for more protections and higher pay.

Police arrested several employees of nursing homes and other facilities at the Capitol on April 8, after a sit-in protest organized by the New England Health Care Employees Union District 1199. Protesters demanded the state provide more funding for better wages and benefits to reflect care workers’ roles on the front lines of the pandemic.

Helping colleagues navigate new landscape

Staffing is a major concern at Masonicare especially as older nurses and other professionals opt for early retirement in the wake of the pandemic.

“We’re going to have to work through this, elevate those positions, find ways in which we can attract that next employee,” Venoit said.

Despite the challenges, Venoit sees growth ahead for Masonicare. The company’s home-care and companion and homemakers services experienced rapid growth during the pandemic, more than offsetting losses from the nursing home, Venoit said.

Another growth area has been assisted living, especially in recent months. Masonicare at Chester Village, a continuing care retirement community in Chester, has maintained a 92% occupancy through the pandemic.

“We’re seeing a pretty significant rebound in the demand for our assisted living and residential living side,” Venoit said.

Even as the company asks the state to reduce nursing home beds, it increased behavioral health beds — reserved for those with mental illness — from 29 to 43.

Masonicare as a whole now serves 5,000 people a day in three retirement communities, the nursing home, a residential care home, a home-care company and a homemaker/companionship company.

For fiscal year 2020, Masonicare saw revenues drop to $157.7 million from $158.3 million in 2019, even as losses narrowed to $514,000 in 2020 from $15.9 million the year before. Venoit credits strong home-care demand and a 6% cut in operating expenses for the improved financial performance in a pandemic year. The company also received about $6.1 million in state and federal pandemic relief funding for 2020.

Masonicare’s mix of businesses has been so resilient in the past year that other companies are calling on a regular basis seeking advice, management help and even potential acquisition, according to Ann Collette, vice president for strategy and business development.

In response, Masonicare set up Gen M, an in-house consulting firm to help other healthcare companies with management and strategy.

“This is an industry in flux right now,” Collette said, adding, “it was anyways prior to the pandemic. Our goal is to help our colleagues out in whatever way that they need.”