By some accounts, Lancaster Manor was a sinking ship when the Lancaster County Board of Commissioners sold the nursing home in December 2009.
The Nebraska Department of Health and Human Services had placed the manor on probation two weeks before commissioners voted to sell what some have called the county's most valuable asset for $8,050,000.
The probation -- the second in two years -- was related to care issues in the 293-bed nursing home. Nine deficiencies, ranging from repeated skin tear issues to losing track of a resident who later was diagnosed with a fractured hip, were found in an October 2009 survey. Nineteen problems were found in 2008. Probation meant the home could take no new clients until the deficiencies were cleared.
The manor also was losing money. Nobody knew exactly how much because of inadequate record keeping and accounting practices, enormous billing problems and bad management, the commissioners were told.
In a December 2009 report, state Auditor Mike Foley said the manor had "unprecedented operating losses" of $300,000 in fiscal year 2008 and $1.7 million in fiscal year 2009.
Foley's staff found $284,000 in under billings for the two months they looked at, $70,000 in over billings and $102,000 in therapy services that were contracted and paid for but never billed to residents.
"It was broke. I don't mean financially only. The system and internal procedures for delivering care had broken down," said Keith Fickenscher, the administrator brought in by the manor's new owner, Hunter Management.
What a difference a year makes.
Fickenscher said the picture has changed in the year since the sale was completed.
Lancaster Manor, now called Lancaster Manor Rehabilitation Center, has regained its reputation of providing quality nursing home care and is operating in the black, Fickenscher said.
But neither he nor Avi Rothner, a vice president with Hunter Management, would say how much money the nursing home earned in 2010, since it is now owned by a private company.
"We more than reversed the county's losses. We are one of the financially stronger homes in the state," said Fickenscher, who was president and CEO for Tabitha Health Care Services for eight and a half years before joining the manor.
What's more, resident numbers are on the rebound, rehabilitation services have quadrupled, meaning more Medicare reimbursements, residents and families say they are satisfied, major deficiencies have been corrected, some remodeling has taken place and there's more in the works.
Hunter Management, based in Evanston, Ill., created two Nebraska-based companies -- Lancaster Manor Real Estate and Lancaster Manor Rehabilitation Center -- to own the land and operate the nursing home at 1001 South St.
Fickenscher took over on Jan. 1, 2010. He said employees, understandably, were angry and tense about losing their union wages and benefits. The county paid much better than other local nursing homes. He said about 25 of the home's 330 employees left their jobs in the month before he took over.
Residents and their families were worried about the quality of care they would receive under Hunter Management. Opponents of the sale had alleged that Hunter had a poor track record of running nursing homes in Illinois and other states.
The path to success
How did a private company succeed where the county apparently failed?
Fickenscher said he and his staff focused on accurate billing and straightened out the Medicare/Medicaid conundrum the business office under county ownership apparently couldn't solve.
They also trained employees in resident assessments and reimbursements. And they remodeled and expanded the rehabilitation department and more than quadrupled its use, resulting in more money from Medicare, a federal health insurance program for persons 65 and older and disabled persons.
Eighty-eight percent of the clients served in the manor's rehabilitation program are successfully discharged to their previous living arrangements, Fickenscher said.
Said associate director Virginia Leacock: "When we took over, there were only two Medicare residents in the rehabilitation program, and now we are consistently maintaining 22 to 25."
Leacock noted that the federal reimbursement under Medicare is two and a half times more than for Medicaid, a state-administered health insurance program for people with low income.
Prior to the sale of Lancaster Manor, some people feared the new owner would reduce or no longer accept Medicaid residents and go after higher-paying private care residents. That hasn't happened.
The percentage of Medicaid residents is 79 percent, which, Fickenscher believes, is the highest in the city.
One of the biggest cost-savings measures: Fickenscher abolished the practice of hiring temporary agency help, saving between $16,000 and $20,000 a month.
"If Lancaster Manor had continued on this same track on Jan. 1, 2010, it would have been boarded up," Fickenscher said. "It could not survive the way it was operating. It was in deep trouble. It would have cost them their license."
'The staff was so caring'
Francine Poppe, whose mother, Fern, has lived at the manor for about five years, said she has no concerns over the care her mom received last year.
"I don't think I've noticed any difference ... When she's really needed care really bad she's given it," Poppe said.
Has her mother ever complained about her care?
"My mom complains a lot," she joked.
If anything troubles Poppe, it's the turnover in staff. "I've seen a lot of ads for help there," she said.
Rod Lane, a church youth director in Lincoln, said his grandmother, Debloma Collier, spent the last two and a half years of her life at the manor and was treated well by both county and Hunter Management employees. She died in December.
"For us, I think it (the transfer in ownership) was seamless. You never heard the staff complain. Her room was always well kept. She never looked miscared for," Lane said. "All the way to the end, the staff was so caring."
During her last few months, his grandmother was under hospice care and staff came into her room to say how they enjoyed taking care of her and how she had touched their lives.
"They really had a heart for what they did," Lane said.
Kim Kaspar, president of the American Federation of State, County and Municipal Employees Local 2468, which represented manor employees, believes resident care has "suffered a little bit" under private ownership.
"They are still struggling to keep that quality of care there," she said.
And what about the manor employees?
"I believe that things have gotten worse for people working there," Kaspar said.
She cited health insurance as an example. A single employee now has to pay about $98 a month; under county ownership, it was free.
"Most of the people won't be able to afford insurance. Overtime is mandatory. They don't use temporary help. They just work them to the fingertip bones."
Under county ownership, the manor had about 330 employees. A year later, the nursing home has 299, according to Leacock.
Fickenscher said there are 147 former county employees on the payroll. He said there was "no way" a private company could match the county's benefits and pay, which was $2 to $3 an hour higher.
"We did not cut anybody's pay," Fickenscher said. The county employees that stayed remained at their county rate. In addition, he said, employees now get a benefit package which includes a biweekly supplement to help them offset the cost of health care insurance.
When the labor union was dissolved on Dec. 31, 2009, the new owner no longer had to pay union benefits, which helped its financial bottom line.
"I honestly feel that the county is not done with the manor at this point," Kaspar said. "There's going to be issues coming up with the manor for years to come."
County issues remain
The public debate and rancor over the sale has diminished, but the county board is still wrestling with manor issues.
Commissioners have to decide if they want to create an endowment with the $2.6 million netted from the sale or set the money aside for a rainy day.
Dennis Meyer, the county's budget director, said the county may have to pay out about $300,000 in workers compensation claims filed by former employees. There's also unemployment insurance.
The county board transferred about $500,000 from its general fund into the manor fund to settle those claims, Meyer said, and about half of that has been spent on workers comp.
Because of a looming budget crisis, the county board would like to return the $500,000 to its general fund, possibly using some of the $2.6 million from the manor sale.
Meyer estimates the county saved about $630,000 last year by not owning the manor. He said that is the amount the county would have spent to provide indirect services such as payroll, risk management and legal advice. It does not include health insurance.
The manor's new owner paid $98,000 in property taxes last year.
If the county had retained ownership of the manor, could it have turned it around financially like Hunter Management did?
"I don't see that we would have been able to do that," Meyer said. "Hunter Management has been able to make some cuts that we as a government have a tougher time doing ... without making some huge, huge cuts."
Meyer speculated that the county would have received less revenue due to cuts in Medicaid. Also, the county would have been forced to lay off employees because of budget problems, as did the Community Mental Health Center, which reduced its staff by four people recently.
"Those (layoffs) were in discussion before the manor was sold," Meyer said. "You'd have to think there would be RIFs (reductions in force) due to the county and state budget crisis."
Physical improvements made
As part of the negotiated sale of the manor, the county board set aside $1 million in an escrow account for improvements to the facility.
Over the last year, Hunter Management has doubled the size of the therapy/rehabilitation room and purchased new equipment, bought 30 flat-screen TVs and plans to buy 263 more, installed a new soft water system, bought a $15,000 whirlpool bathtub and plans to buy four more, improved the air-handling system, re-roofed the courtyard gazebo and remodeled the office space.
Architects have drawn plans for a new employee training room, an expanded rehabilitation area closer to South Street, a resident lounge with a big screen TV, a remodeled main entrance and dining rooms, library, bistro/coffee shop and an ice cream shop.
Fickenscher said some of the work will begin this year. He estimates that the improvements made so far have cost about $125,000.
"We haven't touched the $1 million," he said, but Hunter plans to tap into it to cover some of the remodeling costs.
Fickenscher said the $1 million won't be enough to cover all of the remodeling and expansion plans the owner has for the manor's future.
Fickenscher credited manor employees for turning the troubled nursing home around this past year.
One notable achievement: The staff corrected the nine deficiencies cited by HHS between Jan. 1 and Jan. 20, 2010.
Getting the word out
Despite the success, Fickenscher said, the manor is still fighting an image problem.
There is a perception among some people that because it was a county-owned nursing home, it does not offer the highest level of care.
"We're struggling to place ourselves up there ... We've hired a marketer to go out in the community to tell our story," Fickenscher said.
When Lancaster Manor Rehabilitation Center took over the day-to-day operations of the manor, the resident population was 200. A year later, it is averaging about 228. Total bed capacity is 293.
Fickenscher blames not being at full capacity on the negative comments and publicity surrounding the sale, which resulted in reduced referrals. But thanks mostly to word of mouth, he said, the nursing home is getting positive comments from the medical community.
"I'm really optimistic that this coming year is going to be a lot different than the first year," he said.
When he took over the manor, Fickenscher said, he never concerned himself with "the wisdom of the sale" by the county board.
"I was more concerned with how to keep this place from going into oblivion," he said. "There's never been a nursing home in the state under such scrutiny -- fair or not -- that has engineered this type of turnaround."
Lancaster Manor timeline
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