VALE – The only nursing home south of La Grande may be forced to close because of escalating costs, government regulations and low resident numbers.

That was the message Tom Hathaway, skilled nursing administrator for Pioneer Place, delivered Thursday.

“It’s tough. You have to have the revenue to cover the costs,” said Hathaway.

Pioneer Place is a government entity that furnishes skilled nursing, assisted living and rehabilitation services. A five-member board of local residents oversees Pioneer Place. The facility is funded by a local taxing district but by law that money can’t be used for operating expenses. 

Hathaway said the skilled nursing – or nursing home – and rehabilitation arms of Pioneer Place lost more than $500,000 last year. That kind of financial hit can’t continue, he said.

[ KEEP YOUR LOCAL NEWS STRONG - SUBSCRIBE ]

Hathaway said five factors contributed to the loss in revenue.

• Four successive increases in Oregon's minimum wage.

• A reduction in Medicare residents.

• A state nursing home tax projected to cost Pioneer Place $180,000 a year.

• Recent changes in the Medicare regulations added $100,000 in annual payroll expenses.

• The impact of the Affordable Care Act, as employee health benefits now cost Pioneer Place$250,000 annually.

“We were profitable in June. Until we paid the provider tax. That put us in the red,” said Hathaway.

Hathaway said Pioneer Place needs a specific number of nursing home and rehab patients every day to break even. He said the daily number must remain “consistently around 25 residents and short-term rehab patients per day. Unfortunately, it currently hovers around an average of 19 to 20 per day.”

“We need to get more patients,” he said.

The booming economy isn’t helping either, said Hathaway. 

“With the unemployment rate where it’s at, it is virtually impossible to find registered nurses to commute to Vale,” said Hathaway.

The financial squeeze, said Hathaway, isn’t a new phenomenon. Pioneer Place was able to weather the monetary losses in the past by using its savings and with help from the community.

The assistance from the community arrived in the form of money donated from the estates of deceased local residents. 

Hathaway said the money from the estates injected $2 million into Pioneer Place coffers. 

“Those dollars kept us open,” said Hathaway.

Hathaway said any potential closure – and he emphasized no final decision has been made on the issue – will not impact Pioneer Place’s assisted living center. 

Pioneer Place employs between 70 and 80 employees, Hathaway said. The skilled nursing and rehab side of the facility employs about 40 people, he said.

Pioneer Place’s annual payroll is about $2.3 million.

Hathaway said while he doesn’t want to create a scare, local residents need to know Pioneer Place’s financial situation.

“We’ve lost a substantial sum of money over the last 12 months,” said Hathaway. “For a small-town facility, these government-imposed increases in operating expenses are just too much to absorb in a not-for-profit business.”

Hathaway said he isn’t sure what will happen next. 

“Cross our fingers, I guess, and hope community rallies,” he said.

Pioneer Nursing Home Health District was created in 1975 and in the 1990s local voters approved a bond measure that financed the construction of the facility. Pioneer Place opened in 2003.

Have a news tip? Reporter Pat Caldwell: [email protected] or 541-473-3377.

For the latest news, follow the Enterprise on Facebook and Twitter.

SUBSCRIBE TO HELP PRODUCE VITAL REPORTING -- For $5 a month, you get breaking news alerts, emailed newsletters and around-the-clock access to our stories. We depend on subscribers to pay for in-depth, accurate news produced by a professional and highly trained staff. Help us grow and get better with your subscription. Sign up HERE.