Changing market warrants Lasata study, expert says

Ozaukee County supervisors were told last week they should consider doing another market study to gauge the post-pandemic viability of adding another health care facility to the Lasata Senior Living Campus in Cedarburg.

For years, county officials have eyed adding a 24-bed community-based residential facility, or CBRF, for residents suffering from dementia as a way to close the “continuum of care” circle, saying the campus loses a number of residents each year because Lasata lacks such a facility.

The campus currently includes the Lasata Care Center, a 136-bed skilled nursing facility, Lasata Crossings, a 60-unit assisted living facility, and Lasata Heights, a 60-unit building for independent seniors.

Consultant Michael Peer told supervisors that the market for such a CBRF had shifted since the last market study was completed in 2019.

“The population continues to age,” he said, “but the trend is shifting toward home health care and less toward skilled nursing facilities” like the Lasata Care Center.

That trend accelerated during the pandemic as hospitals were less able to discharge patients to facilities like Lasata.

“Hospitals learned to work with home health care providers” during the pandemic, he said.

In addition, consumer preference to “age in place,” that is stay in their homes  as long as possible, accelerated, Peer said, noting that a “home” can include an apartment at an assisted living facility, like Lasata Crossings.

“A home is a place that is not clinical but residential,” he said.

And with more health care providers and consumers becoming familiar with remote conferencing, seniors are able to consult with providers from their home.

“Overall, it’s been a pretty seismic shift,” county Administrator Jason Dzwinel said. “People are moving into assisted living later and staying as long as they can,” so they have greater clinical nursing needs when they leave and shortening their stay in a skilled nursing facility.

The urgency for a new market study is somewhat heightened as supervisors consider how to spend about $8 million in federal American Rescue Plan Act, or ARPA, funds.

Dzwinel has proposed spending $4.5 million of those funds on the CBRF, about $350,000 more than what was estimated in 2019.

Peer described the CBRF as being located between the two wings of the Care Center so that the two facilities could share staff and kitchen facilities.

Peer estimated the CBRF would generate about $2 million in revenue annually and a “profit” of about $700,000, assuming 90% average occupancy and 100% private-pay patients paying about $6,400 a month.

The Lasata Senior Campus and its three components are considered an “enterprise fund” by the county, meant to support itself without tax levy support and perhaps even turn a profit, to pay for maintenance and to make improvements.

Most Wisconsin counties have gotten out of the nursing home business because Medicaid, which supports low-income residents, does not fully reimburse the county for its costs.

But county officials determined years ago, when there was no skilled nursing facility in the county, that a nursing home is an important service to provide to county residents.

To offset the cost, Lasata’s business model calls for drawing more Medicare and private-pay residents at Heights, Crossings and the proposed CBRF.

About 60% of the Care Center’s residents are patients of Medicaid, a federally funded program that is administered by the state.

“This is really a federal government issue,” Dzwinel said. “Their (Medicaid) reimbursement level causes us to lose money on every patient every day.

“We are in the skilled care business because we chose to be in this business,” Dzwinel told supervisors, some of whom questioned why the county was competing with the private sector.

Supr. Paul Melotik said he also has misgivings about county government providing services available through the private sector.

“But (the county presence is) important for the people who can’t afford to be in nursing homes and the diversity of care allows the county to stay in that business without burdening taxpayers,” Melotik said.

Peer and Dzwinel said about half the 24 beds of the CBRF would be filled with residents from other Lasata facilities, thus freeing up space in those buildings, while the other half would probably come from outside Lasata,

No action was taken by the County Board. Whether to conduct a new study will be reviewed by the appropriate oversight committees, which at a later date will make a recommendation to the County Board.

The proposal comes as former nurses and other employees at the Care Center say patient care and working conditions have declined in the last year, leaving some supervisors openly wondering whether it’s worthwhile to continue to invest in Lasata.

“You don’t invest more money in an area that is not being run well,” Supr. Patrick Foy of Mequon told supervisors earlier this month.

County officials concede there have been chronic staffing problems over the last several years but say nursing levels are still above those required by the state.