Good Shepherd/Chase Acquisition
Demonstrates the Power of Partnership
By Jeff Diamond
no secret that not-for-profit skilled
nursing facilities (SNFs) across
New York are facing unprecedented challenges.
Growing financial and regulatory pressures,
workforce shortages and shifting demographics
have left many providers with little recourse but
to make difficult decisions about their futures.
Some, however, have managed to weather the
storm in a different way: by partnering with other
not-for-profits in their communities.
It’s
What began as a casual conversation at a
LeadingAge New York function led to the
formation of one such partnership between
Chase Memorial Nursing Home, an 80-bed
facility in New Berlin, and Good Shepherd
Communities, a not-for-profit provider of long
term care services in the greater Binghamton
area. Prior to the initial dialogue, Chase had
been considering selling to a for-profit due to
the challenges it experienced as a freestanding
facility in rural New Berlin. With the nearest long
term care provider located approximately 15 miles
west, it had come to play an essential role as
the community’s only SNF. Further complicating
the decision was the fact that Chase, in addition
to skilled nursing, provided several services to
the area indirectly, including low-income senior
housing through a partnership with another not-
for-profit, rental space for the local Head Start
program and space for a day treatment program
for adults with developmental disabilities.
Maintaining those services within the community
was a priority for Chase and what ultimately
led its leadership to contact Good Shepherd to
express interest in an acquisition.
Good Shepherd was equally interested in helping
Chase remain a not-for-profit and preserve
its services in New Berlin. It also, however,
recognized the importance of exercising due
diligence to protect its existing entities, Good
Shepherd Fairview Home and Good Shepherd
Village at Endwell. The organization retained The
Bonadio Group to study the financial feasibility of
the acquisition, developed protections to insulate
each entity from the liabilities of the others
and evaluated how the success or failure of the
acquisition would impact its reputation in the
community. Ultimately, after careful deliberation,
the boards of both organizations voted to move
the acquisition forward.
For Good Shepherd and
Chase, the success of the
acquisition demonstrates
the power of partnership
for providers navigating
a changing health care
landscape.
The benefits of the acquisition, which has
allowed Good Shepherd and Chase to retain
their individual identities, have been significant.
As started under a management services
agreement implemented prior to the acquisition,
Good Shepherd has taken over many of Chase’s
back office functions including: payroll, human
resources, Medicare, Medicaid, third-party and
private billing. Further savings for Chase have
come from Good Shepherd instituting its vendors
and covering all acquisition transition costs with
the help of a $1 million Vital Access Provider
(VAP) grant, which also funded staff training from
LeadingAge New York ProCare. Good Shepherd
has experienced the positive impacts as well,
observing little to no increase in management
costs and benefiting from a management fee
from Chase that reduces the amounts charged to
its other two entities.
For Good Shepherd and Chase, the success
of the acquisition demonstrates the power of
partnership for providers navigating a changing
health care landscape. From implementing a
management services agreement to pursuing a
full acquisition, there are numerous ways that
not-for-profit SNFs can join forces with other
organizations in their communities to weather the
storm and continue fulfilling their missions.
leadingageny.org
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