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The Paynesville Area Hospital District Board of Directors - the regional governmental entity that operates as PAHCS - approved the bed closures at their meeting on Wednesday, March 22.

The first round of bed reductions - seven at the Koronis Manor and five at the Hilltop Care Center are expected to be completed by July 1, 2006. Another five beds at Hilltop Care Center would be decertified by the end of the year.

The recommendation to reduce beds came after staff study, an outside consultant on long-term care, and an inquiry by a special board committee on long-term care.

PAHCS loses $500,000 annually at the Koronis Manor and Hilltop Care Center, CEO Steve Moburg told the board last week, so some changes were needed.

The bed reductions would bring the Koronis Manor from 64 licensed beds (though it currently only has 63 actual beds) down to 57. Hilltop would go from 60 to 55 beds now and then from 55 to 50 beds by the end of the year.

As of Wednesday, March 22, each facility had only 54 residents, meaning the Koronis Manor is running at an occupancy rate of 84 percent and Hilltop at an occupancy rate of 90 percent.

Their goal for the nursing homes was to be 93 to 94 percent occupied, said Moburg, which they met only 12 times in the past year.

In 2005, the Koronis Manor averaged 57.0 residents per day, while Hilltop averaged 53.3.

Under the state's bed closure program, it still pays $2,080 per bed per year for each bed closed. This is not a one-time payment, but an amount that PAHCS can add to its rates for its remaining beds. This state payment sets the prices PAHCS can charged for all its residents, private payers as well.

By closing beds, PAHCS will also avoid paying a state bed tax of $2,815 per bed per year, which is deemed an unnecessary expense since PAHCS has a number of beds that sit virtually empty..

Closing this number of beds would also enable PAHCS to create more private rooms. Actually, PAHCS should be able to double the number of private rooms, which are in greater demand, at both facilities. It now has seven private rooms at the Koronis Manor and ten at Hilltop. By housing only one resident in these rooms where 17 beds will be decertified, PAHCS will have 14 private rooms at the Koronis Manor and 20 at Hilltop Care Center. No structural changes are planned at present; the current double rooms would just be used as a single with only one resident. The state rates for a single room are higher.

At the Koronis Manor, PAHCS will also have space to create a respite room after the bed reduction. A respite room allows terminal patients to die in private, with space for their relatives, without disturbing a roommate and with the dignity of privacy.

This bed closure continues a trend for less nursing home demand. People nowadays are opting for in-home care and other housing services (such as Washburne Court and 700 Stearns Place) for as long as possible, Moburg told the board. Still, he added, "This is not something we take lightly."

This really is not the first reduction in local nursing home beds, said board chair Don Thomes, referring to 2002 when PAHCS decertified beds after it purchased the Good Samaritan Care Center and the Hilltop Care Center from the Good Samaritan Society. PAHCS relinquished the licenses of 46 nursing home beds at the Good Sam and turned that facility into Washburne Court, a 23-bed assisted living home.

With the bed closures and changes in the dietary departments, better integration, etc., PAHCS hopes to reduce its losses on the two nursing homes by $200,000 annually.

There are no anticipated staff changes, said Moburg, since both nursing homes have already adjusted staff to current resident levels. More staff adjustments may be needed when Hilltop is reduced another five beds, down to 50 beds.