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A new Sun set to rise(Stamford Advocate, The (Stamford, CT) (KRT) Via Thomson Dialog NewsEdge) Dec. 21--STAMFORD -- Christmas decorations twinkle on the facade and lawn of St. Camillus Rehabilitation and Nursing Center, but inside the Elm Street building there is uncertainty and anxiety. For the second time in less than a year, St. Camillus is getting a new owner, sparking concerns among patients, their families and employees. Sun Healthcare Group will take over St. Camillus and 75 other nursing homes nationwide after it finishes acquiring Harborside Healthcare Corp. of Boston and receives approval from each state where it owns a nursing home. Sun officials said they could take control of St. Camillus and nine other nursing homes in Connecticut in late February if the deal is approved by the state Department of Public Health. Harborside has a solid reputation for management and delivery of care, but Sun's past includes bankruptcy, a no contest plea to a felony charge of elderly abuse in California and a nearly $600,000 civil judgment for negligence in the death of a Stamford nursing home patient. In 2003, bankruptcy protection allowed Sun to abandon 12 nursing homes in Connecticut, including two former Mediplex facilities, one on Long Ridge Road in Stamford and one in Darien. But Sun officials said the problems are behind them because they have a new management team and board of directors. "Sun's acquisition of Harborside will be a transforming event for Sun, creating one of the nation's premier long-term care operators," Richard Matros, Sun's chairman and chief executive officer, said in announcing the deal in October. In May, the Roman Catholic Diocese of Bridgeport announced it would sell St. Camillus and two other nursing homes, St. Joseph's Manor in Trumbull and the Pope John Paul II Center for Healthcare in Danbury, to Harborside in an effort to keep them open. The diocese said the homes were losing money because of low Medicaid reimbursement. The diocese still owns the land at each facility, operating a 99-year lease with the nursing home operators with an option for renewal, and remains responsible for pastoral care. Priests continue to celebrate daily Mass and offer other religious services. But since Harborside took control in August, the staff has been reduced at all three facilities, and some believe there may be more staff reductions and other changes once the new owner takes over. "Everyone is nervous," said Alda Braccia, whose mother has been a St. Camillus resident for three years. "Family members are watching very closely that the care is as it always was." In transition St. Camillus, which opened in 1988 at 494 Elm St., is a 124-bed facility with 119 residents. John Halleran, administrator for the last five years, has management experience from a for-profit nursing home that included employing a lean staff. "I was making changes ever since I started," Halleran said. But it wasn't enough to stop the financial bleeding at St. Camillus. In September 2005, the diocese announced the nursing homes had lost "several million dollars over the last few years" and was considering a sale. In May, the diocese said it found a buyer in Harborside, which operates 76 facilities in 10 states. At the time, Harborside officials said they would keep all 170 employees at St. Camillus. But, under Harborside, six employees, all clerical, were laid off, Halleran said. St. Camillus had the smallest staff reductions of the three nursing homes, a testament to Halleran's efficient stewardship, Harborside spokesman Bradley Shiverick said. "The three facilities had different staffing levels," Shiverick said. "Each had their own way of doing things. St. Camillus was the closest to our model." St. Joseph's had the largest staff reduction -- 6 percent of more than 500 people, Shiverick said. That included the Carmelite nuns who had run the 297-bed home since it was founded 46 years ago. The nuns reportedly left because their role would have been limited to pastoral care. "Transition is always difficult," Shiverick said. Since Harborside took over, all three facilities have shown a "significant turnaround" in financial health, Shiverick said. At St. Camillus, costs were brought under control, more Medicare patients were admitted, and the occupancy rate rose to 97 percent from 93 percent, he said. Shiverick said he does not expect much to change when Sun takes over. "St. Camillus will continue as a Catholic-oriented, long-term health facility," he said. "The sign out front might change and some of the systems and formulas may change. But the people that work in the facility that care for the patients will be there. That's the constant in our business." None of the patients, their family members or employees interviewed for this story complained about the quality of care at St. Camillus under Harborside. Mission compromised? In October, when Sun announced it would acquire Harborside for about $350 million, the diocese issued a statement. "We look forward to working with Sun Healthcare Group to maintain the vital Catholic mission at the three homes," said Nancy Matthews, chancellor of the diocese. "This announcement further demonstrates the merits of our ground lease agreement. Whichever provider operates the three homes, they must adhere to the Catholicity covenants in the agreements. These are neither optional nor subject to change." But some of the employees at St. Camillus who asked not to be identified for fear they would lose their jobs, said the Catholic mission has been weakened under Harborside's ownership. "We have a Catholic Mass, but where's the Catholic mission?" said an employee who has worked there for nearly 20 years. "You can't have a Catholic mission when it's for-profit. As a parishioner of the diocese, I think it stinks. They could have sold it to someone else." Another longtime employee said the layoffs brought sadness, fear and resentment. "This place is different, without a doubt," she said. Many are convinced that the diocese knew that Harborside would be acquired when it sold the nursing homes. "I believe the church double-crossed everyone," said John Ryan of New Canaan, who has two close friends who live at St. Joseph's. Ryan, a financial adviser, said the transaction was too large and the time between the diocesan sale and the Sun acquisition too small. "I know a little bit about investment banking," he said. "This is the worst of a smoke-filled, backroom deal." The diocese denies it knew about the Sun acquisition when it sold the nursing homes to Harborside. Spokesman Joseph McAleer said the accusation is inaccurate. "We did not know," he said. As part of the acquisition, Sun agreed to refinance or assume Harborside's debt of about $275 million. Deborah Chernoff, spokeswoman for the New England Health Care Employees Union, District 1199, which represents about 100 employees at St. Camillus, said the debt creates an incentive to cut costs more. "For better or for worse," Chernoff said, "the diocese did have a commitment to the residents that doesn't happen with a for-profit organization." Kelly Priegnitz, assistant general counsel for regulatory affairs for Sun, dismissed that notion. "We do not intend to make any significant changes in the local operations. We intend to build upon them," Priegnitz said. "We don't have any intention of reducing the staff." Sun battles reputation Founded in 1989 by Andrew Turner with seven facilities in Connecticut and Washington state, Sun has grown into one of the largest health-care providers in the country, operating 155 nursing homes in 19 states. But Sun has encountered problems. In 1998, a jury in a civil case at Superior Court in Stamford found that Mediplex, a 120-bed facility at 710 Long Ridge Road operated by Sun, was negligent in the death of a 93-year-old woman and awarded her family $584,127 in medical costs and damages. A year later, Sun filed for Chapter 11 bankruptcy protection after more than a year of severe losses -- including a reported $1.4 billion in nine months -- that it attributed to declining Medicare fees. Sun emerged from bankruptcy in 2002 with a reorganization plan that allowed it to restructure its debt and more time to pay back creditors. That year, Sun got a new board of directors and a new management team. Turner left in 1999. "We've worked very hard in turning around the reputation of the company by changing the culture," Priegnitz said. Now "the focus is on resident care." Sun has had problems elsewhere. Last year, Sun agreed to pay $2.5 million in fines and costs and change the operation of its California nursing homes after being charged with violating a 2001 injunction that required it to improve the quality of care at all of its 18 facilities in that state. The injunction was won by California Attorney General Bill Lockyer, who prosecuted Sun on charges of felony elderly abuse deriving from criminally negligent care of residents at a San Mateo County facility during a 2000 Bay Area heat wave. Two nursing home patients died and six others were severely dehydrated or suffered heat exhaustion or heat stroke. Sun entered a no contest plea in 2002. Lockyer also settled a civil enforcement action against Sun alleging numerous violations of state and federal quality-of-care statutes. More than 100 citations were issued by the California Department of Health Services in four years against Sun facilities. Last year's settlement came after Lockyer investigated eight Sun facilities and found "extensive patient neglect," including inadequate-pressure ulcer care, dehydration, malnutrition, weight loss, patient safety and false records. Sun's quality-of-care problems "stemmed from insufficient staffing, inadequate supervision and a lack of staff training," according to the investigation. Priegnitz said there was no violation of the injunction, and the company decided to settle so it could move on. "We didn't believe we should have paid a penny," she said, but "in having to go through these discussions, you don't strengthen relationships with regulators when you bump heads. At the end of the day, a judgment call needed to be made." Priegnitz said the investigation was triggered by the reputation of the "old Sun." In Connecticut, state law requires the Department of Public Health to review changes in ownership of nursing homes and the attorney general to assure the legality of the transaction. "We are very much aware of concerns about the company," state Attorney General Richard Blumenthal said, "and we are scrutinizing its record both in the state and elsewhere." William Gerrish, spokesman for the Department of Public Health, confirmed that a citation was issued at Mediplex of Stamford in 2003 but provided no details. Advocate records show Mediplex was cited for violations that included neglect and improper patient care, and was issued a $570 fine. Gerrish said he does not have information about the 1998 death at Mediplex in Stamford, and would not provide details about other possible citations at other nursing homes that Sun operated in the state, citing the ongoing review. "We issue about 300 of those a year. It doesn't rise to the same level of a formal action," Gerrish said. Sun has not operated in Connecticut since 2003, when bankruptcy protection allowed the company to break its leases at 12 nursing homes. "We are not the same company as when we left," Priegnitz said. "It's a new culture, a new operational platform." Copyright (c) 2006, The Stamford Advocate, Conn. Distributed by McClatchy-Tribune Business News. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |