The City of Philadelphia plans to close its only nursing home by the end of this year, citing fewer residents, persistent losses, and the multimillion cost of upgrades needed at the facility in Fairmount, officials said Tuesday.

“While I am sad to see the Philadelphia Nursing Home close, the financial realities of long-term care and the impact of the pandemic mean that it is simply not feasible to continue to operate such a large facility with so many empty beds,” said Cheryl Bettigole, Health Commissioner for the Philadelphia Department of Public Health.

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The city’s decision will add to a list of 14 Pennsylvania nursing homes that have closed since the coronavirus pandemic devastated the industry by killing many residents, leading to a bigger push to keep people out of the facilities, and raising costs for operators.

The trend nationwide also is for counties and municipalities to sell their nursing homes, which have long served as the facility of last resort for the least fortunate, often indigent individuals who have nowhere else to go. Locally, Montgomery and Burlington Counties have sold their homes.

The closure means that sick and vulnerable residents will have to find a new place to live. The openings at many nursing homes will make it easier to place residents in other facilities than it might have been in the past, officials said.

Some of the roughly 260 residents are expected to be discharged to private homes or family, where they will be helped by home- and community-based services. The city said that no residents will be moved without a safe discharge or transfer plan. The city’s goal is to discharge all residents by Oct. 28. The Pennsylvania Department of Health has approved the closure plan.

“We’re upset about it,” said Diane Menio, executive director of Center for Advocacy for the Rights and Interests of Elders, a Philadelphia nonprofit. “This facility has always taken care of people who are hard to place in other facilities.”

Another advocate, Thomas Earle, CEO of Liberty Resources Inc., a Philadelphia nonprofit that receives federal and state money to help disabled individuals live independently, was elated to hear the news of the pending closure.

“Gunshot victims, [people with] spinal chord injuries, people who are HIV+ or have AIDS have literally been warehoused there for many years,” he said, adding that many of those individuals can be better and less expensively served in community settings.

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Too many empty beds

At the end of May, only 65% of Philadelphia Nursing Home’s 402 beds were occupied, down from more than 90% in 2018. This projected loss at the nursing home for the year ending June 30 is $5.7 million, city officials said. The nursing home employs 277, according to a spokesperson for a nonprofit company, Fairmount Long Term Care, which has managed the facility since 1994.

Medicaid, which pays relatively low rates, covers almost all of the residents at the nursing home.

Among the needed investments at the nursing home are a $2.6 million boiler for heating and $4 million for a campus-wide generator, the city said. The state of Pennsylvania owns the property and leases it to the city for $1 a year.

The land occupied by the nursing facility was home to what is now called Lankenau Medical Center from 1884 until that hospital moved to Wynnewood in 1953. It then became the Henry R. Landis State Hospital for tuberculosis patients, which closed in 1977. Philadelphia Nursing Home, once a unit of Philadelphia General Hospital, which also closed in 1977, then took over the state hospital site.

Residents in the nursing home have long skewed younger than many other facilities thanks to the AIDS unit that opened in 1987, and its long practice of caring for disabled gunshot victims who have nowhere else to go.

A predecessor of Fairmount Long Term Care took over the facility in 1994, after officials in the Rendell administration decided the city could no longer afford to run it. Before that the facility was engulfed in a scandal over alleged fraud by doctors who provided care there.

As is true of many nursing homes, the Philadelphia Nursing Home has its share of bad inspection reports. In March, state inspectors discovered that a general mechanic there was in a sexual relationship with a cognitively impaired resident.

The city’s financial ties to the facility have continued. The city budgeted $520,000 for Fairmount Long Term Care’s management fee in fiscal 2022, said James Garrow, spokesperson for the city health department, which oversees the nursing home. The city also provides a $3.2 million annual subsidy for the home under its contract with Fairmount, he said.

It’s hard to get a clear view of the facility’s overall finances from Medicaid cost reports that Fairmount files with the state because the city keeps some of the revenue that the state provides to the nursing home, according to a Fairmount spokesperson.

“We are saddened by the news of the closure of the Philadelphia Nursing Home even though we understand that given the declining census the city’s decision probably was inevitable,” Fairmount said. “Our focus remains on our residents to ensure that they continue to receive the high quality care that they receive from us and to ensure that they are transitioned to other facilities or community-based services.”

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Help for residents and employees

The city said it was hopeful that employees easily would be able to find jobs at other health care facilities, given widespread workforce shortages.

Local 488 ofAFSCME District Council 33 represents 166 workers there, but did not have an immediate comment on Tuesday’s announcement.

The closure will add to a growing tally of Pennsylvania nursing homes that have shut their doors since the start of the coronavirus pandemic, which killed thousands of Pennsylvania nursing home residents. The pandemic also made it ever harder for nursing home operators to make ends meet because of rising costs for labor and other expenses.

Fourteen Pennsylvania nursing homes have closed since April 2020, including Fox Subacute in Warrington last month according to the Pennsylvania Department of Health. Other closed Philadelphia-area facilities are PowerBack Rehabilitation in Phoenixville and Wellington Court Nursing & Rehab in West Chester, the department said.