Greenwich nursing home is a burden to wealthy town’s finances

Even for one of the wealthiest municipalities in the US, operating a nursing home is a strain. 

Greenwich, Connecticut owns a 121-year-old nursing home. That makes it unusual, since only 5 per cent of nursing homes are government-owned. 

The town is atypical in other ways. With one of the highest per-capita incomes in the country, it has long been a locus of wealth and celebrity, evident in services such as three marinas and a public golf course designed by architect Robert Trent Jones Sr.

Its Nathaniel Witherell nursing home, however, like many such facilities across the country, is losing money.

Founded as a contagious-disease hospital in 1903, the 202-bed nonprofit facility offers short-term rehabilitation as well as long-term and memory care. Situated on what the town describes as 24 rolling acres (9.7 hectares) – just over 3 kilometres from downtown – it touts staff turnover that is a fraction of the national rate. Its kitchen gets its produce from the facility’s culinary wellness garden that was built in 2017 with donor and volunteer contributions. 

But Greenwich had to write off US$4.1 million in bad debt from the nursing home last year, according to documents for an upcoming US$115 million bond and note offering. It still expects to continue funding the nursing home’s operating losses in subsequent general fund operating budgets.  

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The town reported a general fund balance of US$71.8 million in the current fiscal year.

“It’s only the well-resourced governments that can afford” such endeavours, said Dora Lee, director of research at Belle Haven Investments. 

The town is spending about US$6 million to US$7 million a year on subsidies, though that is likely to decrease after a new director found some efficiencies, First Selectman Fred Camillo said in an interview. 

“So we’re trying to figure out a way to have the best possible service delivered for the residents, but in a way that does it efficiently and doesn’t waste any money,” said Camillo, adding that he had volunteered at the nursing home with his dog, and that his father and other relatives have used the facility. 

Soaring costs and staff shortages during the pandemic exacerbated longstanding difficulties for nursing homes and hospitals, such as insufficient government reimbursements and the difficulty of attracting staff to often low-paying, tedious jobs.

“Local governments may be questioning whether the economics of running a nursing home are viable, given the labour shortage and reimbursement rates,” said Lisa Washburn, managing director at Municipal Market Analytics.

There is also a lot more pressure on small, single sites, which cannot achieve economies of scale, she said. 

Seeking to stem the nursing home’s losses, Greenwich put out a call in 2020 for an outside operator and is negotiating a long-term lease agreement with a chosen operator, according to its recent bond documents. 

“I think a lot of people would agree the town is not looking to sell the facility or the land; we’re looking to see if there’s a better way to deliver services,” said Camillo, whose position is equivalent to mayor. 

Greenwich’s general-obligation bonds and notes are scheduled to price on Jan 25 and are top-rated by Moody’s Investors Service. That is because of its economic might, with per-capita income of about US$112,000, compared with roughly US$41,000 nationally, even though 8 per cent of its residents live in poverty. 

Its location along the so-called Gold Coast, the stretch of affluent Wall Street bedroom communities in Fairfield County, also means it is also costly, especially for those not earning Wall Street incomes. It has a median housing value of US$1.6 million and median rent of about US$2,000, according to the Census Bureau. BLOOMBERG