Lisa Haglund, president and chief executive officer of Heritage Ministries, warns that they need to make changes to their operations or they will be like Lutheran and unable to offer skilled nursing. File photo

Lutheran Jamestown recently announced the closing of its skilled nursing facilities, which was taken over by Heritage Ministries. The chief executive officer of that organization is warning that they could be in a similar situation if they don’t adapt.

Lisa Haglund, president and CEO of Heritage, visited the Chautauqua County Legislature’s Human Services, and Planning and Economic Development committees to discuss some of the organization’s challenges.

Haglund said Heritage currently loses $130 a day for each Medicaid patient and they lose over $100 a day for each assisted living resident.

“If we have almost 500 beds and we’re at full capacity, we are losing around $35,000 per day,” she said.

If Heritage tries to cut that back, Haglund said hospitals will become overrun.

“You have patients out in the hallways. You have your county Health Department telling you ‘now is not the time to get sick’ so we have to be very tuned into that,” she said.

Haglund worked for 25 years at Jamestown Savings Bank/Northwest Bank before joining Heritage eight years ago, so her perspective is different from a lot of not-for-profit CEOs.

“You can’t operate a not-for-profit mission without margin and not-for-profits typically tend to understand that and lean into that,” she said. “We have to care about our mission but we can’t always do that day to day.”

Haglund says that Heritage is at risk. “We need to diversify. We were at risk prior to the pandemic. … We need to be aware of that and we need to be very transparent about that. There’s no sugarcoating where we’re at,” she said.

ECONOMIC IMPACT

According to Haglund, Heritage is the fifth largest local employer in the county, with over 800 employees.

She noted that in Chautauqua County, 28% of the workforce is employed in healthcare, with Heritage making up 12% of that total.

When Lutheran closed its skilled nursing facilities, Heritage took 90% of the displaced residents, at an estimated cost of $716,000 for this year alone, due to the majority being on Medicaid.

Haglund said they hired around 20 Lutheran staff members in the transition. “Lutheran was using primarily agency staff, which costs triple of what an average nurse cost, when you’re able to hire them,” she said.

Haglund added that if they “continue to use agency staff as our peers, we will not be here in another year and a half.”

Haglund said in the past, Heritage was in Seattle, as well as in Illinois, Pennsylvania, and New York state. Now they are only in New York and Pennsylvania. “My commitment when I stepped into this role three years ago was to cut off the foot to save the body, and that’s what we’ve done,” she said, adding that Chautauqua County is their primary focus.

PRESENT AND FUTURE

Haglund noted that some of their present challenges include a declining county population, declining tax bases, higher poverty rates and lower educational achievements.

“A greater proportion of our residents are over the age of 65 and that’s going to grow by another 13 to 16%. New York state as a whole is projecting that to grow by 25% over the next 5 years,” she said.

Because of this, Haglund said they recognize they must change and adapt.

“We’ve got to be a disrupter and we have to be an innovator. … We have to invest in those coming out of high school and create people that are going to be loyal to Chautauqua County. We have to diversify and not just keep doing skilled nursing care,” she said.

Haglund would like to offer transportation. “Right now we have dialysis patients who can’t even get transportation every week to the hospital,” she said.

Haglund sees opportunities in innovation, diversification, collaboration, reform, grants, funding and political support.

Haglund said she isn’t looking for Medicaid to solve all of their issues, although she believes New York state needs to do more.

“We recognize Medicaid can’t cover this strain, and there’s other ways. Home healthcare is one of them. Increased assisted living is another. Outpatient therapy is another. But in order to do all of those things, we have to have staff,” she said.

To address staffing issues, she said they have created Certified Nursing Assistant classes. They’re also working with BOCES and Jamestown Community College.

“We’re trying to partner and increase access, equity and support. We also want to diversify. We’re here to support the hospitals and the doctors, and our seniors,” she said.

Haglund said over the next five years, Heritage would like to reduce skilled nursing. “That doesn’t mean we would get rid of it. It just means that instead of having it be 85% of our portfolio, have it move down to 60%,” she said.

She would like to increase assisted living and independent living, add discharge planning, and provide some sort of billable support services for seniors when they get home. Other possibilities include providing outpatient services, expanding their pharmacy and work with mental health providers, and look into some immigration programs to build a larger nurse pool.

Heritage isn’t alone with its struggles. According to Haglund, 42% of hospitals have an operating budget deficit and 68% of senior living facilities have an operating budget deficit.

RESPONSE

Legislature Chairman Pierre Chagnon thanked Haglund for attending.

“The shock that Lutheran put through the community, through the entire county with their announcement is not a unique situation as Lisa has pointed out today. If we collectively, and New York state collectively, doesn’t come to grips with this problem, it’s not going to end with Lutheran,” he said.

Haglund said she was glad to be there and share their challenges.

“I think for 30 years Heritage hasn’t told its story and I don’t think anyone is talking about the senior care community and understanding the impact,” she said.