Abramson Senior Care sells Horsham nursing home to N.J. for-profit group
The only potential buyers were for-profits, a sign that the nursing-home sector is financially risky.
In another sign of how hard it is to run a nursing home even before the pandemic, Abramson Senior Care, a nonprofit, this week sold its highly rated Horsham nursing home to a relatively new for-profit firm from New Jersey called Imperial Healthcare Group.
Carol Irvine, president and chief executive of Abramson, said the 324-bed nursing home, a fixture in Philadelphia’s Jewish community, was marketed widely, including to the nonprofit sector. But none of the seven bids were from nonprofits — which usually don’t have as much appetite for financial risk as for-profits do.
Advocates for the elderly have often criticized for-profit nursing home operators for short-changing care to make profits for owners and investors, including during the coronavirus pandemic. But for-profits are typically the only buyers for free-standing nursing homes like Abramson Residence.
Experts said it’s very hard to maintain high levels of services in the current payment system.
"If we paid more for nursing home care, for long-term care, this wouldn’t be as big of a problem,” said Rachel M. Werner, executive director of the Leonard Davis Institute of Health Economics at the University of Pennsylvania.
“It’s true not just in nursing homes, but across the health-care sector, that not-for-profit providers, hospitals, nursing homes, etc., generally have higher quality of care than for-profits,” said Werner, who also holds professorships at Penn’s Perelman School of Medicine and at the Wharton School.
Irvine expressed great confidence in Chaim “Charlie” Steg, Imperial’s chief executive. Abramson executives and members of the board interviewed each of the seven potential buyers, and Steg, a licensed nursing home administrator in New Jersey, clearly came out on top, she said.
“We’re committed to an incredibly high standard of care and he respected that,” Irvine said.
Imperial, which is based in Lakewood, N.J., provided a statement on its purchase of the nursing home, which was part of the Abramson Center for Jewish Life. “We will continue to put residents and caregivers at the center of everything we do and are focused on providing a seamless transition that that will have little impact on the lives of residents.”
Imperial said it will continue kosher meals and rabbinical services at the facility, which has been renamed the Horsham Center for Jewish Life. The price was not disclosed.
Steg, who was unavailable for comment, first appears in federal nursing-home ownership data in 2018 and now is part-owner of 11 Pennsylvania nursing homes, including seven in the Philadelphia area. Most of them used to be operated by Genesis Healthcare Inc., which is based in Kennett Square and is one of the nation’s largest for-profit nursing home companies.
Five of Steg’s facilities have low, 1-star ratings in the federal government’s five-star Nursing Home Compare rankings, but because he has owned them for such a short period of time, it’s possible that conditions under the previous owners are responsible for the low ratings.
“He’s bought pretty distressed facilities and it takes about two years to start turning quality improvement with the five-star rating,” Irvine said.
Steg’s biggest partner in the Philadelphia-area facilities, is Yisroel “Chuny” Herzka. Federal records list him with ownership interests in 26 nursing homes in four states accumulated over little more than three years.
Abramson, which will also continue operating a 35-bed nursing home at Lankenau Medical Center, started to explore selling its Horsham property a year ago, before the coronavirus pandemic made running a nursing home much more difficult and costly. The organization had lost $4 million on the Horsham campus in each of the previous two years.
“We were able to fill that hole for many years with our surplus revenue from our other lines of business and our very robust fund-raising, but our last two years we just couldn’t make that equation work,” she said.
About 65 percent of the nursing home’s business is from patients covered by low-paying Medicaid. Abramson’s daily rate was $214 last year, virtually unmoved from $213 ten years ago, Irvine said.
The Horsham campus accounts for $30 million to $35 million of Abramson’s $70 million in annual revenue, Irvine said. The campus also has a 48-apartment personal care facility, which the new owners will take over. Abramson has an agreement to continue providing hospice, home care, care advisers, and some physician services on the campus.
Before the sale, Abramson employed 750, including 400 on the Horsham campus. Imperial agreed to hire about 350 of them, including 92 percent of the direct-care staff, Irvine said. About 50 back-office staff were expected to lose their jobs. Abramson has moved its headquarters to Blue Bell.
Abramson, which traces its roots to the Home for the Aged and Infirm Israelites of the Jewish Hospital Association, opened in 1866 in West Philadelphia. It is not abandoning the elderly. Instead, it will expand the services it already offers at home and in the community, Irvine said.
“We’re excited about the future of serving people where they want to be served, which is at home,” Irvine said.