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Report: To break even, Cedar Haven Nursing Home must cut more than $3 million

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In order for the county-owned Cedar Haven Nursing Home in Lebanon to break even financially, it would have to reduce expenses by $3.1 million, according to a county-commissioned report.

Lebanon County’s Board of Commissioners heard that Wednesday in a report about the facility’s financial situation, and they heard another report about how the home could possibly reduce expenses and run more efficiently.

No decision was made on the future of the nursing home. The commissioners have debated for months whether they should sell the facility or keep it without it being a financial drain.

The financial report, performed by Griffin Financial Group LLC, which has offices in Lancaster and Reading, presented data showing that of eight peer, county-owned nursing homes in the region, Cedar Haven ranked seventh in operating margin at -11.9 percent.

Only one of the homes — Berks Heim Nursing and Rehabilitation in Berks County — has a positive cash flow, though the report notes the home expected a 30 percent loss of operating income in 2013.

Claremont Nursing and Rehabilitation Center in Cumberland County ranked second with a -0.4 percent operating margin, and Pleasant Acres Nursing and Rehabilitation Center in York County ranked last with a -27.4 percent operating margin, according to the report.

“The combination of flat operating revenues and increasing operating expenses makes it very difficult for county-owned nursing homes to have positive (or break-even) operating income,” according to the report.

The efficiency study, performed by Complete HealthCare Resources-Eastern Inc. of Dresher, did offer some suggestions on how to get to that $3.1 million operating deficit, by both cutting expenses and raising revenue. The dozens of suggestions in the 47-page report included charging an extra $5 per bed, per day; increasing residents by 10 a day; and decreasing staff by about 36 in eight different departments.

“It appears that Cedar Haven has had difficulty adapting to many of the changes in the (h)ealthcare industry over the past several years,” the report states.

The county’s subsidy to Cedar Haven has increased dramatically in the last decade, according to the efficiency report. The facility was self-sustaining in 2002, with no county money given.

In 2012, the subsidy was $3,061,432 and the county expense in 2013 is expected to total about $4.4 million — a jump of about 43 percent.

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