Wednesday evening (Aug. 2) the public was invited to an open town hall meeting meeting held at the Marcus Community Center in regards to a letter representatives of Heartland Care Center recently signed of intent to affiliate with Cherokee Regional Medical Center (Cherokee Regional), a non-profit health care organization that provides services in Cherokee County as well as in surrounding areas.
A group of close to 50 concerned people attended the meeting to find out more on the issue concerning Heartland Care Center. There have been many challenges since the start of the COVID-19 pandemic in 2020 that nursing homes have been struggling with. The healthcare in nursing homes and care centers, from that time on have experienced labor shortages as well as rising costs of operating these places.
It was during those COVID-19 days that Heartland Care Center, as well as other nursing homes, could have no resident leave the facility or have anyone come to see them. Family members/friends could be seen on the outside of the facility having contact with residents who sat on the other side of the glass. Employees could go home in hopes of not bringing home what they left at the end of their shift. Labor shortages began at this time for these places.
Payments from Medicare and Medicaid were not increased enough during this time when the cost of rising expenses were needed. When this happened, nursing homes had no choice but to close their doors. In 2022 there were 11 nursing homes that closed in Iowa as well as 6 that have closed in the first 6 months of 2023. With these closing, residents had to find another place which was not easy to find. What other nursing home would take others in when they were experiencing labor shortages as well as financial problems also?
Heartland Care Center, as well as other nursing homes, had no choice but to find help from other organizations to “partner up” with. This is when Cherokee Regional was contacted to help provide purchasing power that Heartland, a small organization, could not easily obtain on their own. Cherokee Regional could provide the improved power for supplies as well as their management for those areas that Heartland could not such as human resources, billing, and accounting.
With the need for increased nursing home beds in the near future, Cherokee Regional, with their services they offer, did decide that they could offer Heartland help with this. Their affiliation will help ensure the hospital has access to beds to send patients to when the patient needs more care. Heartland would be the place for this further care.
All nursing homes belong to Iowa Health Care. (Cherokee Medical is affiliated with Unity Point Health System.) Nursing homes that are under 45-60 patients are considered too small to be able to stand alone in order to withstand unexpected expenses. Heartland Care Center falls into this bracket as they have 38 residents.
Through the help that Cherokee Regional will provide, Heartland will remain non-profit. Control remains local. The local board will stay as is. There will be no restriction on how many Medicaid patients Heartland can take in. Heartland patients can see who they want—they have their choice of providers. There was a better price on physical therapy offered from Cherokee over what Floyd Valley was charging. Which means Floyd Valley therapy will not be coming to Heartland. Heartland will NOT be affiliated with other Cherokee nursing homes.
The Heartland Care Center board is: Mitzi Klingenberg, Bob Leavitt, Steve Kunzweiler, Dennis Brady, Sandy Tapper, Darrell Downs, and Ed Schlenger. (If there are any other board members, this is what was given to me.) The decision of the Heartland board and administration was not a last minute decision—they have been considering this for quite some time when they could see some help would be needed in the near future. They did not want to see all the years it took to finally get Heartland Care Center to go down the drain without trying to do something about it.
Following is the Affiliation of Heartland Care Center with Cherokee Regional Medical Center:
Heartland Care Center Challenges: Standalone organizations are challenged with the volume for purchasing power that allows discounts on supplies and services. Depth within support departments such as accounting, billing and human resources. Financial strength during challenging periods where cost is out pacing revenues. This impacts cash flow to meet daily cost as well as implementing changes to generate revenue producing services. Access to low/no cost capital funds.
Cherokee Regional Medical Center: Cherokee Regional has a focus to ensure the communities we serve have sustainable healthcare services. As payment pressure continues in Healthcare it is important that there are quality care for patients post-acute care hospital stays to reduce re-admissions which will reduce cost of re-admission for hospitals. Heartland is the only standalone non-profit nursing home that Cherokee Regional providers serve as all other are corporate owned with no local ownership. Growth within our business lines depend on partnering with organizations in which one approach is affiliating with organization that aligns with strategic objectives.
Leading Age Iowa Situation Report February 16, 2023: Workforce has shrunk by more than 11% and cost has increased by 15% while revenues have grown by half that amount. Critical Staffing Shortage in aging services especially nurses have led to higher utilization of temporary staffing agency. The fastest growing age group in Iowa is 65+ with the 85+ forecast to grow by 90% by 2050. 17% of Iowa is over the age of 65, while like many rural counties, Cherokee County has a 65+ population that is 24% of its total. At the beginning of 2022 there have been 23 nursing homes announce their plans to close, which 17 have over the last 18 months. Rapid aging of America: In the next several years the Baby Boom generation will be over the age of 65 and by 2034 there will be more senior adults than children for the first time in American History.
Structure of affiliation: Both organization are 501c3 non-profit organizations. Heartland Care Center will remain its own organization under the same status and tax identification. Sioux Valley Memorial Hospital Association dba Cherokee Regional Medical Center will be the soul corporate member of the organization. A local Board will manage Heartland with a minimum membership a simple majority of the board members having a Marcus address. Cherokee Regional’s board will have reserve powers as it relates to board member selection, corporate financing as examples.
Objectives in the first 12 months: Ensure stable cash flow for operations. Onboard Heartland as contracts allow for purchasing groups and services to reduce cost of operations. Focus on recruitment of patients and residents. What will change for employees? Cherokee Regional leadership will work with the Heartland leadership team to understand current policies and procedures and identify areas where support is needed. Over time, we will work together to explore opportunities to stream-line and integrate Cherokee Regional and Heartland.
Initially, Heartland employees will still be paid and receive benefits through current practices at Heartland – there will be no immediate changes. After a Human Resources understands current processes, a plan will be shared with how and when employees will transition to Cherokee Regional payroll processes and benefits. The employees of Heartland provide invaluable care to Heartland’s residents. It is our intent to create the least amount of disruption for employees, so residents care remains their highest priority.