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PAHCS paid $1.8 million for the two facilities, whose value was appraised at $2.8 million.

The Good Samaritan Society's intention to sell was announced in October 2001 and scheduled to be finalized this spring. PAHCS has leased both facilities since May, when the finalization of the purchase was delayed by legal glitches with the tax-free bonding.

Lee Bergstrom of Carlton Finance told the hospital board last week at their monthly meeting that the financing for the deal ($1.85 million) was complex, in part because it was the first financing his firm had ever done to purchase a nursing home. "I thank you very much for your patience," he told the board.

Since May, both facilities have operated under their new names: Washburne Court for the Paynesville facility and Hilltop Care Center for the Watkins facility.

With the merger, PAHCS now has 175 nursing home beds and over 400 employees. PAHCS also operates a 30-bed acute-care hospital, six clinics, and a 30-unit senior congregate housing facility (700 Stearns Place).

PAHCS has done a marketing study on the needs of long-term care in the area, which revealed the need for fewer nursing home beds, affordable assisted living, and a dementia unit. The marketing study showed a need for 123 skilled beds at present, which drops to 104 by 2005.

PAHCS - which is in the middle of a $7.4 million expansion and remodeling project - did receive a $3.2 million exception from the state moratorium on nursing home construction, which could be used in the future to add a new wing to the Koronis Manor in Paynesville, changing the facility from one with primarily double rooms to one with a majority of private rooms and adding private bathrooms and more home-like amenities.

To get the exception, PAHCS would have to decertify up to a quarter of its nursing home beds.

The most likely way to do so would be to turn Washburne Court, which is presently a board and care facility, into affordable assisted living. PAHCS has also received a $250,000 grant from the state to use towards assisted living.

Switching nursing home beds to alternative care methods, like assisted living, has been a statewide trend, driven by the state having too many nursing home beds. The grant and the exception most likely won't be used until at least 2003.

A future dementia unit - which is a separate area for patients with cognitive disorders, apart from the general population - would most likely be located at the Hilltop Care Center in Watkins.