The Greenville Health System (GHS) Board of Trustees this afternoon unanimously approved the sale of its skilled nursing facility, The Cottages at Brushy Creek, for $10.1 million to Orianna Health Systems, a regional, for-profit company that owns 48 nursing centers in 11 states.
The Cottages will be renamed Brushy Creek Health and Rehabilitation Center, but little else will change for patients, said Stan Healy, Orianna senior vice president of post-acute strategies. Healy worked at GHS as a senior administrator until late 2015.
Orianna, which was known as Covenant Dove until the company changed its name on June 1, expects to close on the purchase by Sept. 30, 2016, Healy said.
Greenville County has more than 1,500 skilled nursing beds, and Orianna Health has 36 percent of the county’s market share. The Cottages accounts for 8 percent of the market share, and the remaining 56 percent are owned by a variety of nursing home organizations, said Malcolm Isley, GHS vice president of strategic services.
Isley said GHS is selling the 144-bed facility as part of its plan to develop strategic partnerships with other health care providers, including post-acute providers, such as Orianna.
GHS anticipates needing access to 3,000 nursing home beds as the health system shifts from the fee-for-service model to a value-based model, Isley said.
Since the health system doesn’t own enough skilled nursing beds to cover its hospitalized patients’ needs, one way to increase access is through partnerships with a company like Orianna that owns many of these nursing facilities. Through a partnership the two organizations can prepare for a future where their payments will rely on greater efficiency and meeting quality measures, Isley said.
What this means is that health care payments are moving into the direction of paying large health systems and providers one price per patient. This one, up-front payment might have to cover the patient’s hospital stay, therapy, medication and care at a skilled nursing facility or home care or outpatient services, including rehabilitation. In order for a health system like GHS to manage all of a patient’s medical needs, it has to have partnerships with other organizations, Isley explained.
“We need to work together to align our quality measures for patients and unify payments,” he said.
For example, suppose a patient had a bad accident and needs multiple surgeries and life support care. Eventually, the patient might get a little better and could be transferred to a skilled nursing facility, which could help the patient recover as well as any hospital could.
If there are not enough nursing beds available in the community, then the recovering patient has to stay in the hospital, taking up a bed that could be used by another, sicker patient. When hospitals are paid the same fee for every day a patient is hospitalized, there is not a financial incentive to move that patient to a skilled nursing facility, where patient care is less expensive than the hospital.
But under the new population health or value-based care model of one, up-front payment, the hospital will actually make less money by keeping a patient in the hospital bed longer than medically necessary.
GHS and Orianna expect to form formal partnerships when advanced payment contracts occur, although there is no formal partnership agreement at this time, Isley said.
“When we enter into a contract together, we’ll have good collaboration and work closely together,” he said.
Healy told the GHS board that Orianna, like other skilled nursing providers, has raised its private-pay rates in recent years, but they won’t give existing patients at The Cottages “sticker shock.”
Patients who run out of private funding can continue to stay at the nursing home as Medicaid patients because good planning will keep enough Medicaid beds available for existing patients who might need them, Healy said.
“In a worst-case scenario, if we don’t have a bed available at The Cottages, we will have the patient go to another Orianna site,” he said.
Orianna has about 700 total skilled nursing beds in the Upstate, where 13 of its 17 South Carolina facilities are located.
GHS notified The Cottages’ patients and staff in June of the proposed sale. The facility’s staff, numbering about 200, will be offered an opportunity to become a part of Orianna’s team or transferred within GHS or receive severance, Isley said.
