New Alliance To Serve Aging Baby Boomers

July 9, 2007
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GRAND RAPIDS — Two long-term care nonprofits have agreed to become partners in preparing to meet the needs of the aging baby boomer generation.

The 115-year-old Holland Home and HHS Health Options, established in 1979 as an outgrowth of a Junior League project, have agreed to a “strategic alliance” that will eventually put them under the same umbrella.

The two will become sister organizations under a holding company called Christian Living Services. H. David Claus, president and CEO of Holland Home, said he expects it will take a year to jump through the legal and Internal Revenue Service hoops for Christian Living Services to become established and the new corporate structure to be fully in place. The companies will remain nonprofit.

Holland Home provides services on three campuses including a skilled nursing facility, assisted and independent living, as well as hospice, home health care and rehabilitation.

HHS Health Options’ focus is to bring services to people who remain in their own quarters instead of going into nursing homes. The agency primarily provides case management, under contracts with the state, for older people who qualify for several needs-based government-funded programs. HHS Health Options also is one of three agencies collaborating on the West Michigan Care Connection, a pilot program focused on connecting Medicaid-qualified people with long-term care resources that help to keep people in their homes.

Claus said that bringing together a care provider with a case management specialist recognizes the reality that long-term care faces in capacity and funding as the baby boomer generation ages.

“An enormously large group of people is coming down the aging pipeline. They are going to have a major impact on our existing system,” said Claus. “Our belief is the way the current systems are designed; they won’t hold up to the demands being put on them, care-wise and financially. We don’t believe the state and federal governments are going to be able to afford those systems for the people that are coming.”

Claus said he expects the future holds more emphasis on cheaper care for the elderly, and keeping them in their homes with support such as help with meals, medications and chores is a less expensive alternative. He said he’s unconcerned about cutting into demand for Holland Home’s 250 skilled nursing beds. The goal is to provide a continuum of elder care services, from independent living apartments to hospice.

“We can be positioned to help create the future and respond to the future,” he added.

Denise Zoeterman, president and CEO of HHS Health Options, said her 60-employee organization will buy “backroom services” such as accounting and human resources from the 950-employee Holland Home, but she does not expect any layoffs. She said HHS Health Options earlier this year sold a for-profit subsidiary called Pathways, which works with self-insured employers, to another health agency called MPRO.

She said she thinks Holland Home and HHS Health Options complement each other.

“Holland Home has a lot of brick and mortar,” she said. “People buy condos, they have assisted living, they have nursing homes, hospice care. They have a variety of things that are more internally focused. HHS Health Options is an organization that, for the last 30 years, its focus has been external. The HHS philosophy is to go to the participants, go to the home, and provide whatever services somebody needs to stay in their home.

“Coming together, we can look at a full continuum of services, from very little service to a high level of service.”

The two organizations are partners with three others in the Program for All-inclusive Care of the Elderly (PACE). In this program, people who meet the criteria for skilled nursing care are brought to Holland Home’s Fulton Manor campus for services such as physician and nurse care, rehabilitation, podiatry, speech, audiology and eye care, yet they remain living at home or in assisted living.

HHS Health Options administers several state programs that can enhance services to people in home-based care, including meals, personal care, medications, housekeeping and home maintenance.

One of those programs is Michigan Choice Waiver. Under this program, Medicaid-eligible adults who need nursing home services get them in their own homes, plus additional services not covered by Medicaid such as chores, meals and private-duty nursing.

Zoeterman said contracts for the Michigan Choice Waiver program and the West Michigan Care Connection preclude a full merger of HHS Health Options with a care provider such as Holland Home. That led to the creation of the holding company, she said.

Holland Home operates Raybrook Manor, Fulton Manor and Breton Woods. The faith-based nonprofit cares for about 1,900 residents daily, Claus said, including 250 in skilled nursing, 500 in assisted living and 1,200 in independent living. Its four subsidiaries also will be transferred to Christian Living Services: HomeCare of Holland Home, Faith Hospice, Rehab Dimensions and the Holland Home Foundation.

In a document filed with Internal Revenue Service for the tax year ending 2005, the latest year available, Holland Home reported net revenue of $1.6 million on total revenue of $38.74 million, and $16.1 million in net assets. In the same tax year, the Holland Home Foundation reported net assets of $6.84 million, with total revenue of $775,137, including $195,218 in public support.

In its IRS filing for the tax year that ended in September 2006, HHS Health Options, 5363 44th St. SE, reported a net revenue balance of $874,444 on total revenue of $9.28 million, which included $5.38 million in government funding.    

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