Recent surveys indicate that more than 70% of hospital based SNF units lose money. These hospitals are quickly realizing that they are more effective not providing long term care services and focusing on their core business. This situation has been compounded in the past year by a shortage of med-surg beds in many hospitals, with limited or no room for expansion.

Montgomery Memorial Hospital in North Carolina was faced with such a situation and opted to close their 39 bed long term care unit, "Small rural hospitals across the country are struggling to keep their doors open and are having to make difficult decisions in order to maintain their economic viability and continue to provide care to their communities," said Kerry Hensley, vice president of operations. "Unfortunately, Montgomery Memorial Hospital is no exception. This decision has been very difficult for us. The residents and staff of our Skilled Nursing Facility are very important to us."

There are political problems for many hospital administrators in such a decision. Long term beds are viewed as a community asset and therefore, the decision to close a long term care unit can create a public relations nightmare. Typically the decision is motivated by the host hospital’s determination that the provision of skilled nursing services is not financially feasible in an acute care setting, and the strategic direction of the hospital must focus on services more in line with the hospital’s core services and market demands.

The solution for many hospitals has been to find a strategic partner to undertake the relocation of the SNF beds to a nearby, stand-alone facility. The key for the hospital administration is that this new skilled nursing facility is built with someone else’s money, on someone else’s balance sheet, with someone else undertaking the staffing, operations, and reimbursement headaches. From a public relations point of view, the patients from the community are relocated to a new, state of the art facility that benefits from and supports the hospital’s discharge needs.

Smith/Packett has built a reputation over the past 25 years in the Southeastern United States as the premier hospital partner in the relocation of licensed SNF beds to attractive, new skilled nursing facilities. Smith Packett’s understanding of both the operating and regulatory environment for independently managed skilled nursing care as well as an understanding of hospital campus issues has given Smith/Packett an instrumental role in putting together transactions that make construction of a replacement nursing facility a viable option.

There is a long list of hospital partnership successes and references that Smith/Packett has amassed in its years of experience in providing this service. Below are just a few examples of those partnerships: