CROWN POINT, Ind. — A northern Indiana nursing home is closing one of its facilities after a shortage of workers contributed to a drastic increase in labor costs.
On Aug. 9, Wittenberg Lutheran Village, Inc. notified the Indiana Department of Workforce Development and the mayor of Crown Point that is closing its entire skilled nursing facility. This will result in layoffs impacting 71 workers.
In a release, Wittenberg Village said the closure comes as the senior housing industry has been significantly affected by the COVID-19 pandemic, the subsequent labor crisis, and the sharp increases in the cost of goods, services and health insurance.
The company said over the past several months, labor costs at the nursing home have increased drastically. This is primarily due to the shortage of clinical team members.
“We’ve had to supplement with agency staff, and the cost to do so is significantly more expensive,” the company said in a release. “Additionally, in many cases, the reimbursement of health care costs is lower than what is needed to cover the rising costs of expenses, or to provide capital for improvements, which cannot be sustained.”
The company said it’s not alone in the struggle. A recent report released by the American Health Care Association (AHCA) and National Center for Assisted Living (NCAL) highlights the growing number of nursing home closures since 2015, as well as projected closings in the months ahead.
The report found more than 1,000 nursing homes have closed since 2015, including 327 closures during the pandemic. Another 400 are projected to close in 2022 based on current financials.
Wittenberg Village said there are no plans to close the other levels of living at the nursing home. Lutheran Life has no plans at this time to close skilled nursing in any other community.
The report said nursing homes that close tend to be smaller facilities in urban settings where the majority of residents rely on Medicaid. Since 2015, 44,459 residents have been displaced by closures.
Wittenberg Village officials said they had a plan in place to help their skilled nursing residents find new providers. They have entered a formal partnership with a local skilled nursing provider with a similar mission, who will maintain care as a preferred provider.
Residents have until Oct. 31 to be safely relocated. However, the company said it will continue to support residents and their families until they find a new provider.
The Worker Adjustment and Retraining Notification (WARN) Notice states that 71 workers are being affected by the closure. The company expects the employees to be separated from employment beginning Oct. 9, with all separations accomplished by Oct. 31.
In its release, the company said a plan is in place to support these impacted team members and hoped to retain as many as possible. This could include transitioning to another area of Wittenberg Village or another Lutheran Life community.
The AHCA and NCAL said nursing homes will continue to struggle and close for good unless policymakers prioritize long-term care for meaningful resources and support.