JENISON — Seeking to cuts losses from reduced Medicare funding, Sunset Retirement Communities and Services plans to close a rehabilitation center in Jenison and replace it with a memory center for dementia patients.
The 35-bed Waterford Rehab Center stopped accepting new patients as of today and will close by March. Sunset Retirement Communities & Services plans to transition the rehab center for long-term memory care and open it by late fall.
“It was a hard decision to make. We have poured our hearts and souls into creating the best sub-acute rehab we could and we did all the measurable things right,” said Sunset CEO Steve Zuiderveen. “But economically and from a stewardship perspective, it wasn’t sustainable, so we had to change direction.”
The move comes three years after the nonprofit Sunset Retirement Communities opened Waterford Rehab. The center’s planned closing largely stems from the nearly 20-percent reduction in payments from traditional Medicare and Medicare Advantage plans for short-term rehabilitation care after patients are discharged from a hospital.
Reimbursement payments went down as operating and labor costs went up, resulting in a loss of $1,000 per patient last year, Zuiderveen said. About 95 percent of the rehab center’s patients in 2017 were covered by some form of Medicare.
“We lost money on every one of them, even though we had tremendous outcomes and reduced our costs to the extent we could until we didn’t feel we could reduce it anymore and still provide the quality of care that people deserve,” he said. “We just reached a point where it cost us more per day to provide the care than we could get reimbursed.”
Reductions in Medicare payments for short-term rehab care have been causing financial pain for centers, Zuiderveen said. Lower Medicare and Medicaid reimbursements were cited three years ago as a main cause for the closing of the former Southwest Regional Rehabilitation Center in Battle Creek.
At Sunset, transitioning Waterford Rehab to a long-term memory center will meet a growing demand.
In announcing the change this week, Sunset cited data from the Alzheimer’s Association that by 2025, more than 6,000 adults in Ottawa and Kent counties who have dementia will need care in an assisted-living center or nursing home. Right now, current capacity in both counties can handle only about 440 dementia patients.
“Our strategic planning ensures this is the right solution to meet the needs of our neighbors in the long-term. This is the most responsible care option for our communities as we experience rapid growth in memory care among the aging population in West Michigan,” said COO Chris Matzke.
Lacking capacity for dementia care, Sunset turns away about 100 people annually who are seeking help, Zuiderveen said. Sunset, a major provider of senior care in the region, presently provides dementia care at its Baldwin Street assisted-living campus in Jenison and the Brookcrest Nursing Home in Grand Rapids, “but the demand is greater than our capacity.”
“We really looked at the situation at said, ‘OK, we can continue to do sub-acute rehab at a significant loss, or we can use those same resources to serve a community need that’s not being met,’” Zuiderveen said. “We saw this as a way we can meet that long-term care need that is so significant out here.”
Renovating the Waterford Rehab Center will cost an estimated $500,000 to $600,000, Zuiderveen said. The plan is to create three “neighborhoods” within the facility of 12 to 14 private living areas each. Each of the neighborhoods will have its own amenities such as a smaller cafeteria, rather than a large central cafeteria.