Focus and Health Care

Lack of need may stall Grand Haven nursing home proposal

North Ottawa system scrapped plan early this year for the same reason.

October 4, 2013
| By Pete Daly |
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Lack of need may stall nursing home proposal
The state is prepared to license only 15 new skilled nursing home beds in Ottawa County, but a pair of projects are in the works that would increase that number by 150. Courtesy Thinkstock

The Alliance for Health will hold a public hearing Oct. 17 regarding four proposed investments in health-care-related projects that require a Certificate of Need from the state of Michigan.

Two of the proposals on the agenda will not be endorsed by the Alliance, according to its president, Lody Zwarensteyn, because the state is currently prepared to license only 15 new skilled nursing home beds in Ottawa County.

One of the proposals is a 40-bed nursing home in Jenison, which Sunset Manor proposes to build on its site at an estimated cost of $9.75 million, to be called Waterford Rehab Center III.

The other is a 125-bed facility in Grand Haven that would be called Regency at Grand Haven, which Ciena Healthcare Management of Southfield is proposing to build at a cost of $9.375 million.

Steve Zuiderveen of Sunset Manor said the application actually is a “hedge.” Sunset received approval from the Michigan Department of Community Health in 2011 to build a new 40-bed facility at the same site, but is now awaiting state approval of Sunset’s changes to its original design for that facility.

Although Sunset does not expect the state to reject its proposed building changes, if it does, Sunset’s previous allocation of 40 new beds may be put back into the pool for Ottawa County. In essence, said Zuiderveen, Sunset wants to be already “in the queue” for reconsideration for those same 40 beds if it has to go that route.

Zuiderveen said Sunset Manor does not “really feel there is a significant need for additional beds in Ottawa County — but there is a need for new beds.”

What he was referring to is Sunset’s plan to move 40 of its existing allocated beds that are in the 130-bed Brookcrest skilled nursing and rehab facility in Kent County, to the new campus in Jenison. The Brookcrest facility was built in the 1960s, he added.

However, the site for the proposed new Waterford Rehab Center III, while only four or five miles from Brookcrest, is in Ottawa County.

“CON rules say we can’t just move the existing beds from Kent County to Ottawa County, so the only way to get the beds on the new campus is to go through the CON process,” said Zuiderveen.

Ciena received approval from the state early this year to build a 47-bed nursing home in Grand Haven, which it is calling Grand Haven Care Center. However, last week Ciena submitted a new application to the Alliance for Health that would expand its planned facility to 62 beds — in effect, absorbing the 15 new beds the state currently will allow in Ottawa County. That revised application is not on the Alliance for Health agenda for Oct. 17.

Zwarensteyn said the MDCH had, in recent years, decided Ottawa County needed more nursing home beds, although the Alliance for Health repeatedly has disagreed with that assessment. Zwarensteyn said managers of Ottawa County nursing homes also have expressed the opinion that no new beds are needed in Ottawa County — and Don Holwerda would agree.

Holwerda is COO of North Ottawa Community Health System’s extended care services, which includes an 84-bed nursing home in Spring Lake. He said that, in 2010, the state allocated 125 new nursing home beds to NOCHS, which was planning to build a new 125-bed facility south of Grand Haven. However, NOCHS cancelled the plan entirely and returned the 125 beds to the state’s Ottawa County pool early this year after looking carefully at the demographics and demand, “and we said, the market is not going to bear it. … The demand is not there.”

So the state had 125 beds put back into the available pool — but after that, made its current determination that only 15 are actually needed in Ottawa County after all. Holwerda said that determination “validates” the NOCHS decision to cancel plans for its new nursing home.

“There are plenty of empty beds (in skilled nursing homes) right now in the broader Ottawa County area,” said Holwerda. “We all have (excess) capacity.”

He said the earlier state calculations on need for new beds was apparently driven by the aging population in Ottawa County, but changing factors are affecting the actual market for skilled nursing homes. Most of the cost of living in a nursing home is covered by public sources, mainly Medicaid and Medicare.

Holwerda said the flow of money now is increasingly going to home-based care services, which enable more people to live out their days at home. Many older people who have been hospitalized and discharged are now skipping nursing home facilities in favor of their own homes, and even when a person does end up in a nursing home, “their length of stay is going to be shorter than what it is today.”

Overall, that means that demand is going down for skilled nursing home beds.

Ciena Healthcare Management is a for-profit company that operates many nursing homes in Michigan and Connecticut. It is proposing to lease the new Grand Haven Care Center for $4.625 million over 15 years.

Anis Khan, chief financial officer of Ciena, declined a request for an interview but provided a statement through a PR firm that only addressed the expanded application for its proposed Grand Haven Health Care.

“Ciena Healthcare applied for 15 skilled nursing beds in Grand Haven to add to an existing Certificate of Need that contains 47 beds. The exact location is yet to be determined and the budget will depend on the total number of beds obtained,” said Khan in the statement.

He did not mention Ciena’s other pending application for the proposed 125-bed Regency at Grand Haven, which is on the agenda Oct. 17.

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