OLATHE, Kan. —The Johnson County Board of Commissioners (BOCC) voted 4-3 Thursday morning to postpone its vote to terminate an agreement for a county supported nursing home.
In 2007, Johnson County entered into a 20-year agreement with Evergreen Living Innovations (ELI) to manage and operate a nursing home at 11875 South Sunset Drive in Olathe. The agreement is set to expire in 2027.
Under that agreement the county leases the building commonly known as the Johnson County Health and Human Services Center to ELI and provides the company with an $800,000 annual stipend to support the facility.
The facility was constructed in 1996, and based on its current condition, county staff are now recommending the building be demolished.
Next week the board will consider using $29 million from the Countywide Support Fund (CSF) to end the contract early and support the construction of a new facility for ELI. Construction of a new facility is estimated to take roughly two and a half years to complete.
“I see it being a costly option no matter what. The biggest thing that I see as an advantage for us as a commission, as a county, as an organization as a community is for us to not be in this business,” Commissioner Jeff Meyers said.
“I think this provides the opportunity for us to no longer have to be worried about these types of contract situations.”
Under the current contract the county is obligated to pay ELI the remaining $4 million balance of the 2007 contract, but the board debated funding to support a new facility.
Commissioner Charlotte O’Hara said she understands the responsibility to pay out the remaining contract, but doesn’t support providing additional funding for a new facility.
“We are probably going to be providing this facility for another three years [during construction]. That means that there would be only two years left on this lease. I don’t understand why we can’t just honor this lease to the end, 2027,” she said.
“There is only two additional years that we would have to provide this facility to Evergreen. Then we are free from the contractual agreement and so are they,” O’Hara said.
“Whether it’s now or whether it’s later, those costs are going to be there. The alternative that’s basically been presented is that we get out of this business. So at the end of 27 our subsidy would cease and Evergreen Living and their patients would not have a place to go. I think that’s an issue we need to recognize,” BOCC Chair Ed Eliert said.
Roger Templin, an attorney representing ELI, said the proposed $25 million would be used for the construction of a new facility or the renovation of another existing building.
Assistant County Manager Joe Waters said immediate repairs for the facility are estimated to cost roughly $9 million. Waters said that cost would increase if ELI were to remodel the facility to remain at its current location.
“A projected [estimate] if the intention were to remain in the building, not to make improvements, but just in terms of remodeling the interior or changing configurations. The estimate from two years ago was $26 million. We certainly of course in the construction market being what it is today, that could be escalated by maybe 30%,” Waters said.
The current contract requires at least two-thirds of residents at ELI to be Medicaid recipients. If the termination agreement is approved by the board, the county would no longer subsidize ELI services and the number of Medicaid patients accepted to the new facility would likely need to change.
Evergreen Living Innovations CEO Chris Osborn said moving forward the company would like at least 30% of their clients to be Medicaid recipients.
“Our goal is always to maximize the number of Medicaid residents we have, whether that’s through the Medicaid program or the home community based program,” Osborn said.
While plans for a new facility have not yet been finalized, Osborn said the new building is anticipated to have roughly 120 beds.
“Our aging population in Johnson County is increasing. We are going to continue to need more quality, available, accessible facilities for people. Especially for people who may not have the financial means to live at some of the more expensive facilities,” Commissioner Janeé Hanzlick said.
Commissioner Michael Ashcraft made the motion to postpone the final vote on the contract until the following week.
“I would feel much better if I had a fuller understanding of the fiduciary components of it. Also, the options that have been considered to make sure we have covered those bases before we buy into a $25 or $29 million investment,” Ashcraft said.
Nearly a dozen people spoke about the proposed contract termination plan during the public comment period Thursday morning.
Olathe resident Mary Blake questioned why the county hasn’t kept up with maintenance on the building.
“This building has been falling apart for 15 years and has not been maintained. What type of care are we giving to our senior citizens in such a facility?” Blake asked.
Rodney Whittington, CEO of Method Healthcare, said building a new facility may not be the best option for the county, because there aren’t enough trained nurses to staff it.
“To add another building is detrimental to the care of the residents in Johnson County. There is no way to staff them at this point and it’s only going to get worse. People left our profession in droves during COVID and they haven’t come back due to increased salaries,” Whittington said.
Whittington suggested it may be more beneficial to the county to invest in ways to make staffing more sustainable through nurse and CNA education programs.
Scott Heady is the chair of the board for Villa St. Francis, a direct competitor to ELI. Heady said many families are now reconsidering placing their loved ones in nursing facilities because of issues stemming from the pandemic.
“We ran 95% occupancy in 2019. Today we run 82% occupancy. Evergreen is running 86% occupancy, we called them the other day. We called a number of other nursing homes in the area,” Heady said.
“If I take all of those and add them up, of those eight or nine homes, it’s about 84% occupancy. The reality is in Johnson County we are over bedded. There are beds for people who are on Medicaid and need care.”
Linda Gallagher serves as secretary on the ELI Board of Directors and spoke in favor of the proposed plan.
“I wanted to join the board because of its mission to serve 65 beds of people who are on Medicaid. This would preserve Evergreen’s mission to continue that. Yes, we’ll have to change the mix, but the mission will continue in a new facility that is much needed,” Gallagher said.
Richelle King of Overland Park requested the county conduct a survey of the current available Medicaid beds at facilities throughout Johnson County.
“Creating a new facility is not only reckless to our community, but we don’t have staff. We don’t have people to care for our loved ones, so don’t be negligent and just consider this,” King said.
The BOCC is scheduled to review the proposed contract termination plan at its next meeting on Thursday, Oct. 6.