$500M in New Nursing Home Beds Coming

Feb 19, 2015

Nursing home beds have been in short supply in Florida for more than a decade.

But the Agency for Health Care Administration on Friday will authorize its top picks to add another 3,100 spots across the state.

The end of this 14-year moratorium can’t come soon enough for Lillian Lara of Orlando.

Richard Montgomery is a short-term rehabilitation patient at The Commons at Orlando Lutheran Towers, a facility where nursing home beds are in short supply.
Credit Abe Aboraya / Health News Florida

Her 87-year-old father fell in December and, after a hospital stay, he’s had a bed in the short-term rehabilitation section of The Commons at Orlando Lutheran Towers.

Lara says her father understands he can’t go back home and likes where he’s staying now. But while the company that owns The Commons has nearly 500 beds in a high-rise complex, its 135 long-term nursing home beds are in demand.

They run 95 percent full, on average. So Lara’s father will have to move somewhere else.

“That’s where we’re at: waiting and seeing,” she said. “…Plus praying to God to give us a miracle.”

Statewide, AHCA has identified demand for 3,115 new nursing home beds to serve the current population. And the competition to provide those beds is fierce. Companies have put in 138 different applications to build nearly 18,000 beds across Florida, as shown in the interactive map above. In Central Florida alone, companies are asking to build more than 4,300.

That means for every bed the state approves on Friday, it will deny five more.

Agency for Health Care Administration Secretary Elizabeth Dudek said regardless, Floridians will see a significant surge of new nursing home beds open by 2017.

“You’ll still have the largest batch we’ve had probably since the late 90s,” she said.

Elizabeth Dudek, secretary of Florida's Agency for Health Care Administration
Credit Agency for Health Care Administration

  When the state first issued its nursing home bed moratorium in 2001, companies built housing such as a 600-square-foot assisted living apartment at The Commons.  

That now-vacant space may be converted into a new nursing home room if the state approves it, said Kerry Gerrity is associate executive director of the Orlando Senior Health Network, the company that owns the Commons.

“This is a typical apartment. It’s got a kitchen so we have plenty of plumbing, electrical, a bathroom that’s ADA compliant,” she said.

The Orlando Senior Health Network is just one of the companies vying for the new nursing home beds. Its application to the state of Florida would expand its nursing home by 40 beds, a $2.6 million project.

Alicia Labrecque, CEO of the Orlando Senior Health Network, said she wasn’t expecting the Legislature to lift the moratorium. Florida lawmakers in 2001 stopped the new construction to stem the increasing expense nursing home beds were having on the Medicaid budget.

Today, about 60 percent of all nursing home patients use Medicaid to pay for their care.

“I wouldn’t have thought they would open any beds because the moratorium’s been so long,” she said.

The Florida Health Care Association estimates that the nursing home boom will bring in $350 to $500 million construction over the next two years. It will provide a steady stream of work for construction workers, and could create more than 5,200 permanent jobs.

For a patient, a private nursing home bed in Florida costs more than $91,000 per year. That means the expansions could be worth $285 million in revenue every year – hence the stiff competition.

Tony Marshall of the Florida Health Care Association
Credit Abe Aboraya / Health News Florida

But nursing homes in general have a small profit margin, about 2.3 percent, said Tony Marshall, an administrator with the Florida Health Care Association, an industry organization for nursing homes.

Marshall said most nursing home patients have Medicaid coverage, which does not cover all of the nursing home’s cost for care. But they’re able to make a profit on short-term Medicare patients who just need rehabilitation, he said.

“Hospitals are now providing much more acute services, and the nursing homes of today are following suit,” Marshall said. “They’re sort of the step down unit from that acute care hospital for rehab and continuing medical care.”

Take Richard Montgomery, who’s doing bicep curls while sitting in a wheelchair at The Commons at Orlando Lutheran Towers. The Walt Disney World engineer became a short-term patient when the inner lining of his aortic valve ruptured in December.

“It literally felt as if someone was stuffing a bowling through my heart,” Montgomery said. “And I’m riding a motorcycle at the time. Terrific pain. And I thought ‘Man, what is that?’” 

Credit Florida Health Care Association

  Montgomery’s open-heartsurgery led to complications. He lost all his toes and half of his left foot. Now he’s learning how to get around again, before he can head back home.

“I’m looking for soon to have one of these little scooters where I can propel myself around and have the nurses chase me,” he said.

Montgomery’s experience is a sign of things to come for Florida’s nursing home industry. A flood of baby boomers are reaching retirement age and will need help dealing with disease and other health complications.

The 3,100 new nursing home beds that will be built in the next few years won’t be enough, said the nursing home association’s Marshall. Florida will need as many as 20,000 new beds in the next 20 years, he said.

Lillian Lara is more concerned about today. She and her 87-year old father are stuck waiting for a nursing home bed, or looking for another facility that isn’t their first choice. She said long-term, they know what to expect. Her mother is buried in a cemetery in Orlando.

Her father bought the plot next to it.

“And he got his space there waiting for him. And he said, ‘It can wait, I ain’t going nowhere,’ ” she laughed.

Where he waits in the meantime isn’t so clear.

Reporter Megan Milanese contributed to this story. Abe Aboraya is a reporter with WMFE in Orlando. Health News Florida receives support from the Corporation for Public Broadcasting.