Firm plans nursing home revamp

A national hospital management firm hopes to turn a Capitol Hill nursing home into the first of a string of long-term health care hospitals.

Center may shift into long-term hospital
BY PATRICK RUCKER
Examiner Staff Writer

A national hospital management firm hopes to turn a Capitol Hill nursing home into the first of a string of long-term health care hospitals.

Specialty Hospitals of America,based in New Hampshire, is seeking to buy MedLINK Hospital, a 95-bed facility that largely serves elderly patients.

Specialty plans to make more than $3 million in renovations over the next four years, converting the facility into a long-term acute care hospital, said the company's president, Eric Rieseberg.

Although the facility is not a traditional nursing home, Rieseberg said, "this is a service and program for older patients."

It is also a niche created by Medicare reimbursement rules, he said. Under payment guidelines, hospitals receive a fixed rate for many medical procedures. If a patient can be moved to a long-term care facility to recuperate, the hospital will cut expenses and keep a larger share of its reimbursement. Medicare pays for long-term care under a differentformula.

That fact is at the heart of Rieseberg's business model and explains why the number of specialty acutecare hospitals has been increasing at 10 percent annually for the past five years.

"Specialty hospitals are a blessing because they take the patients that hospitals are losing money on and want to get rid of," said John Whitman, a professor of hospital administration at the Wharton School.

While specialty hospitals can relieve pressure on a burdened health system, Whitman said they do little to lower overall expenses.

"In a sense, this is like hospice care was seen as a saving grace because it would take people out of acute care beds," he said. But because other patients filled those beds, there were no real savings.

With a graying American population, every empty hospital bed is bound to be needed for years to come, Rieseberg said.

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