With the future of long-term care secured for at least 40 residents, the Motion Picture & Television Fund is turning its attention to bringing financial stability to the beleaguered institution in Woodland Hills by cutting costs and possibly luring to the San Fernando Valley the first standalone long-term acute-care hospital. After deciding late last month to keep 40 skilled nursing beds open, the fund is now exploring a deal with partners to convert some portion of the 250 beds on the Woodland Hills campus into a specialty hospital for critically ill patients who require hospital stays longer than 25 days. Such patients are typically on ventilators and feeding tubes for extended periods. There is only one other such facility in the San Fernando Valley, a 30-bed unit housed inside Valley Presbyterian Hospital, operated by Barlow Respiratory Hospital. According to published reports, the fund is negotiating a deal with Louisville, Ky.-based Kindred Healthcare Inc., a $6 billion, for-profit operator of post-acute care facilities nationwide. Under the proposed terms, published by the Los Angeles Times, Kindred would remodel the existing hospital and pay the fund $10 million a year to lease some portion of the 250 beds. Robert L. Beitcher, CEO of the fund, said he could neither confirm nor deny those reports. But in an interview, he said he continues to work to identify potential partners that could make use of the available beds, which except for the 40 long-term care beds, are now largely empty. He is also focused on a reorganization plan to reduce the flow of red ink at the organization. The health care portion of the organization had $108.3 million in expenses in 2009, the latest numbers publicly available from GuideStar, and revenues of $106.4 million. The fund laid off 18 people the week of Jan. 23 and 50 in the past 12 months, reducing the headcount at the institution to 700 as part of that reorganization, Beitcher said. At the same time, the fund announced it was committed to keeping 40 long-term care beds open indefinitely on the site. The announcement was a reverse-course for the fund, which in 2009, under former CEO Dr. David Tillman, said it would close the facility entirely. At the time, the Woodland Hills facility had 136 residents in its skilled nursing home, 90 percent of them on Medi-Cal, Beitcher said. Because those beds were housed in an acute care facility with certain fixed costs, the fund was losing $1 million a month keeping the facility open, he explained. Residents and families mounted a campaign to keep the home open. But in the ensuing three years, many residents moved out while some passed away. Some 29 were left in the home. Beitcher, former CEO of Panavision and a member of the board, was appointed CEO in February 2010 and has since been focused on finding ways to keep the nursing home open to residents who need it while at the same time balancing its budget. “We finally settled on 40 beds,” he said. “It still leaves us with a shortfall, but it’s a sum we can absorb.” Nancy Biederman, co-founder of the organization Saving the Lives of Our Own, who spearheaded the campaign to keep the home open, said that while 40 beds is not ideal, she hopes the fund will “figure out a way to make it larger one day.” “I knew there had to be a way to save it,” she added. “We commend Bob Beitcher for looking through a wide-angle lens to solve a problem that some viewed as unsolvable.” With this issue behind him, Beitcher must now find a way to use the rest of the beds on the campus. Besides the 40 long-term care beds, which are now accepting new residents, the rest of the facility has an average daily census of three people a night, Beitcher said. “It’s mostly empty.” Kindred declined to comment on its plans, but local hospital industry officials as well as analysts who cover Kindred said there is a real need for long-term beds for critically ill patients needing extended hospitalization. “General acute-care hospitals tend not to do this well,” said A.J. Rice, health care service analyst for Susquehanna Financial Group in New York. “A patient on a ventilator a long time requires a nurse sitting there taking them on and off at regular intervals. It’s a labor-intensive process and most intensive care units (ICUs) in a hospital are not equipped to tie up nurses for so long. They like to turn those beds over in a few days.” James Lott, executive vice president of the Southern California Hospital Association, said there is certainly need for such a hospital because of the aging population – most patients in these facilities tend to be the old and frail. But he says the business model may prove challenging. “The government is not paying too well these days and unfortunately, with long-term acute-care, typically more than half comes from them,” he said. For Kindred to profitably fill some 200 beds in Woodland Hills, it will need a payer mix with more private insured payers, he said. In the meantime, Kindred has more pressing concerns before it can move forward. Following the rapid growth of these long-term care specialty hospitals in the last decade — a period that according to an extensive New York Times report saw the cost of this care soar to $4.8 billion from $400 million in 1993 — Congress put a moratorium on building more of these facilities. “CMS and Congress said we better define the population so there is more consistent criteria about who needs this care,” said Rice, the analyst. That moratorium was due to expire in 2012. To further complicate the challenge facing Beitcher, Congress has recently extended that moratorium indefinitely to make up for a 27 percent cut to physicians who treat Medicare patients. “It’s taking from Peter to pay Paul,” Lott said. As Beitcher awaits the outcome of these conflicting forces, the fund has begun to welcome new residents while a group made up of entertainment industry volunteers plans a spruce-up day on Feb. 11 to help paint and prepare rooms.
Motion Picture Home Eyes Deal to Fill Empty Beds
