A rendering shows the proposed Clippership Landing nursing home in Damariscotta. It would be built at a cost of $45 million while two other LincolnHealth facilities close. Courtesy of MaineHealth

A planned $45 million nursing home in Damariscotta could help a local health care provider turn around money-losing services for Maine seniors – though for some the project might mean a longer drive.

LincolnHealth and developers of Clippership Landing last week began the process of getting state regulatory approval for the 102-bed facility.

If built as proposed, it would consolidate services with roughly the same number of beds and now provided by LincolnHealth in two locations: Cove’s Edge Nursing and Skilled Rehabilitation in Damariscotta, and the long-term care and skilled nursing wings at St. Andrews Village, a retirement community in Boothbay Harbor.

By 2025, the LincolnHealth locations could be replaced by a single 74,000-square-foot facility on Piper Mill Road in Damariscotta. The proposed 20-acre site, currently undeveloped, is about a mile from Cove’s Edge – and 16 miles from St. Andrews Village.

Clippership would be built and owned by Sandy River Co., a Portland-based senior care development firm, and operated by North Country Associates, a Lewiston-based nursing and rehabilitation provider. LincolnHealth, an affiliate of the MaineHealth system, hopes the new facility will help solve an old financial challenge.

Cove’s Edge and St. Andrews Village have been hemorrhaging millions of dollars annually for at least five years, according to LincolnHealth. Before the pandemic, it estimates it was losing over $2 million each year. But those losses tripled after the onset of COVID-19 and have totaled as much as $6.5 million. 

The health care provider, like many others, has also seen a shift in the type of patients requiring skilled nursing services.

A decade ago, it was the norm for patients rehabilitating from hip or knee surgery to receive skilled care, LincolnHealth President Cindy Wade said. They would be discharged after a few weeks and the insurance reimbursement was adequate.  

But changes in surgical practice and in the criteria for skilled units now mean that patients who qualify tend to have greater, more complex needs such as wound care.

“The cost to provide this type of care far exceeds any reimbursement we receive,” Wade said. “This shift has caused a financial shift for facilities trying to break even with the care being provided and the cost of that care being much higher than reimbursement for the care.

“That just wasn’t sustainable,” Wade said. 

LincolnHealth spent years looking for ways to save money and ultimately decided that the only viable path was to enlist help from specialized businesses like Sandy River and North Country.

Consolidating the two current skilled nursing sites into Clippership Landing should improve cost-efficiency and help avoid the threat of closure faced by smaller facilities, according to Daniel Maguire, managing partner at Sandy River. 

Typically, 90 beds or so is about the right size without getting too big or institutional-feeling, Maguire said.

In an online FAQ, LincolnHealth said, “nursing home operators and developers make their models work through economies of scale and right-sizing facility size. The ‘sweet spot’ for success is between 92 and 105 residents” due to staffing ratios. 

Clippership will feature three “neighborhoods” of 34 rooms apiece, providing memory care, skilled nursing care and long-term care. 

The facility will offer private rooms exclusively, a desirable feature during the pandemic and something that health care professionals said is still relatively novel in nursing homes.

FINANCIAL, GEOGRAPHICAL TRADE-OFFS

Under Sandy River Co. and North Country Associates, which are both for-profit companies, the price of care at Clippership would be higher than at the current sites run by nonprofit LincolnHealth. Maguire would not say how much rates might increase – that depends partly on financial estimates to come and the project’s certificate-of-need review by the Maine Department of Health and Human Services.

Sandy River began the certificate process with a Dec. 1 notice to DHHS. Maguire said he hopes the new facility will receive approval for higher MaineCare reimbursements, and that crews would break ground next summer. The project also requires a final OK from the Damariscotta Planning Board, which is scheduled to consider that on Jan. 3.

Construction could be completed by late 2024 or early 2025. Maguire expects Clippership to turn a profit in year two.

LincolnHealth considered other locations for the build-out as well as additions to its existing sites. But the organization said it couldn’t find space that was large or accessible enough.

It’s concerning any time medical services leave an area, said Angela Westhoff, president and CEO of the Maine Health Care Association. Clippership Landing is an unusual case where services are being consolidated rather than disappearing, she said.

There have been mixed feelings about the new location, Wade admitted. Some families are unhappy they’ll need to travel to Damariscotta to see their loved ones. But for the most part, she believes, families have understood why the move is necessary.

Wade said her team is still trying to figure out how to manage transportation between the two facilities – for example, if a husband in assisted living at St. Andrews wants to see his wife in the new Damariscotta nursing home. 

It’s also unclear what may take the place of Cove’s Edge and the two wings at St. Andrews. LincolnHealth has said it’s evaluating many options, including the expansion of memory care, a needed service in the area. 

With a large shortage of nursing-home employees statewide, there are plenty of jobs to fill and all 160 employees at the current sites will be able to continue employment, according to Wade.

‘THE VERGE OF CATASTROPHE’

Plans for Clippership Landing come amid other recent nursing home closures and consolidations among Maine health care providers. 

Nursing homes and other long-term care facilities have found it harder to stay afloat as they face a labor crunch and spiraling expenses. Older facilities are requiring greater financial investment to maintain, and shrinking reimbursements have led to greater losses.

Last year, at least five Maine long-term care facilities shuttered and two Maine Veteran’s Homes in northern Maine narrowly avoided closing after an infusion of state cash. 

Of the five that closed, three – Country Manor in Coopers Mills, Somerset Rehabilitation and Living Center in Bingham and Evergreen Rehabilitation and Living Center in Saco – are owned by North Country Associates. 

Time and time again, the cause comes back to staffing, a problem that existed before the pandemic and has only continued to snowball, Westhoff said. 

The need for workers is already beyond the state’s capacity and the situation is only going to get worse when the industry faces the “silver tsunami” of baby boomers who need care.

“Crisis is not an accurate descriptor,” Westhoff said. “We’re really on the verge of a catastrophe.” 

Nursing homes have experienced worse job losses and slower pandemic recoveries than other parts of the health care industry, according to an August report by the American Health Care Association and the National Center for Assisted Living. 

Nationally, nursing home employment is 14% lower than it was in February 2020. 

The staffing shortages mean seniors and their families have fewer options, as six in 10 facilities are limiting new admissions, according to the report. The impact on access has also put pressure on other health care providers, especially hospitals that are unable to discharge patients in order to free up space.

Aside from violence against staff, the ripple effect of the nursing home crisis is the most acute challenge for many hospitals right now, said Jeffrey Austin, vice president of government affairs and communications for the Maine Hospital Association. 

“It clogs up the pipeline … the (nursing home) beds are just offline,” he said. “A hospital is not a residential setting.” 

Austin stressed that Clippership Landing cannot be viewed as a solution for the state. 

“We cannot expect hospitals to absorb this issue and solve it,” he said. “Opening facilities doesn’t solve the underlying issues. People shouldn’t see our unique desperation in this as the solution to the problem.”