Schlomo Rechnitz “the Philanthropist” Can’t Give’em Away – Nursing Homes…


Nursing home magnate rocks Humboldt County with plans to close three of the area’s six facilities


In remote Humboldt County, where local controversies tend toward medical marijuana dust-ups and billboard blight, a furor has erupted around the fate of three nursing homes – and whether the state will intervene.

In the next four days, the California Department of Public Health will decide for the second time whether the state’s largest nursing home operator can stop accepting patients at three of his five skilled nursing facilities in Humboldt County and begin closing the homes.

Rockport Healthcare Services, the management company for Los Angeles nursing-home magnate Shlomo Rechnitz, did not spell out in its notification letters why it wants to close the homes. However, Rockport spokesman Stefan Friedman told The Sacramento Bee on Friday that the company has experienced a “severe staffing shortage” in the region, and “we have been unable to recruit and retain sufficient numbers of permanent staff to meet our patients’ needs.”

In the last 18 months, Friedman said, the company’s five facilities in that region lost $5 million – a figure critics have disputed.

The prospect of such massive closures has rattled residents, elder-care advocates and politicians in this county of 135,000 along California’s North Coast, a region both revered and reviled for its isolation and challenging travel access. Rechnitz controls five of six nursing homes in Humboldt County and 98 percent of the licensed beds.

If approved, the county would lose 258 of its 446 freestanding skilled nursing beds – nearly a 60 percent reduction – with clients disbursed to skilled nursing facilities as far north as Oregon, or hundreds of miles away in communities throughout Northern California.

Elder-care advocates have long asserted that frail, elderly residents can suffer or even die from “transfer trauma” when they are uprooted from their homes and separated from relatives or other familiar surroundings.

State Sen. Mike McGuire, a Democrat who represents the area, called the company’s actions “irresponsible,” “dangerous” and “completely avoidable.”

McGuire, who happened to hold a town meeting the same week the company announced its intentions, said people in the audience were weeping at the prospect of closures and the likely family separations. McGuire said that Rockport’s chief executive officer, Vincent Hambright, “parachuted into town” in early September and held hastily assembled meetings with residents, then left with many questions unanswered and families feeling panicked.

“People are deeply concerned about the scorched-earth policy this company is bringing forward,” said McGuire, who has urged state officials to intervene. “We’re talking about people’s lives here.”

Besides the threat of transfer trauma for individual residents, he said, the closures would place an enormous burden on the health care system in Northern California and neighboring Oregon. Without enough skilled nursing beds in Humboldt County, an acute care hospital would have to discharge patients to rehabilitation facilities elsewhere, reducing the inventory of skilled nursing beds in those regions, too.

“The ripple effect is significant throughout the region,” he said.

The affected homes, all in Eureka, are Seaview Rehabilitation & Wellness Center (99 licensed beds); Pacific Rehabilitation & Wellness Center (60 beds); and Eureka Rehabilitation & Wellness Center (99 beds).

Earlier this month, the state Department of Public Health rejected the company’s first closure and relocation plan, saying it failed to adequately address the risk of transfer trauma among residents. The letter stated that 190 residents had been identified who would need to be moved if the homes shut down.

Rockport returned with a new closure proposal that the state is set to decide on in the next week. Ronald Owens, spokesman for the Department of Public Health, said the department will approve or deny the plan by Wednesday.

Under California law, if 10 or more residents are likely to be transferred due to a change in a nursing home’s operation, the facility must submit a proposed relocation plan to the state and cannot move residents until it’s approved.


Sen. Mike McGuire, D-Healdsburg


California’s elder-care ombudsman, Joe Rodrigues, and a colleague have lodged a formal complaint with the Department of Public Health, saying the closures would have a “catastrophic impact.” Rodrigues, joined by Suzi Fregeau, the area’s local program coordinator, urged that state officials take the drastic step of seeking a court-ordered receiver to step in and take over the facilities.

In their Sept. 1 letter to the state, Rodrigues and Fregeau chafed at the notion that Rechnitz managed to forge a virtual monopoly in the isolated area.

“It is hard to imagine that the pending crisis could exist if there was local nursing home competition and consumers had choices of other operators,” the elder-care advocates wrote to state Department of Public Health Deputy Director Jean Iacino. “We know of no other comparable city in California where one operator is in position to eliminate over half of the nursing home beds through multiple closures as is being planned here.”

Company spokesman Friedman stressed Friday that “we want to work with stakeholders to develop a solution to the staffing crisis.” He said the company has been forced to hire temporary staff “at an unsustainable cost,” including payment for their housing.

Friedman said the financial conditions in Humboldt County are underscored by the fact “we offered to hand over these homes at zero cost to any other operator.”

“We received no response,” he stated.

If the homes are ultimately put into a receivership, Friedman said, “we will not contest it and cooperate fully to ensure a smooth transition.”

The National Union of Healthcare Workers has challenged the company’s assertions about losing money, contending in a letter to the state that the facilities slated for closure have actually made a sizable profit in the last five years.

Friedman called the union’s figures outdated.


Stefan Friedman, spokesman, Rockport Healthcare Services


The state’s next steps are being watched by elder-care advocates and others, who have been critical of Rechnitz’s rapid growth in California and the quality of many of his homes.

A Bee investigation published last year found that Rechnitz and his principal company, Brius Healthcare Services, controlled about 1 in every 14 nursing home beds in California. As his acquisitions mounted over the past decade – many of them through bankruptcy court – his relationship with state and federal regulators has grown increasingly contentious.

The Humboldt County case is not the first time that transfer trauma has been raised in connection with one of Rechnitz’s business dealings.

In 2014, the company closed a nursing home in rural Fresno County after state officials threatened to shut it down as a result of “immediate and serious risks” to residents. Nearly 80 residents at Wish-I-Ah Healthcare & Wellness Centre near Auberry were transferred, with some making the 450-mile journey to Humboldt County.

Michael Connors of California Advocates for Nursing Home Reform said these former Wish-I-Ah residents may face the same upheaval again.

“It’s just horribly wrong,” he said.

Catherine Pugel’s aging parents have lived at Eureka Rehabilitation & Wellness Center for five years. Her 83-year-old mother has end-stage Alzheimer’s disease. Her father, 82, chose to join her three years ago at the facility, Pugel said.

She said her folks had just celebrated their 52nd wedding anniversary when a letter from Rockport arrived on Sept. 5, announcing the closure plan.

Pugel, who lives in Fortuna, 18 miles southeast of Eureka, was stunned, saying she had great love and respect for the staff members who had “preciously” cared for her parents. With help from Sen. McGuire’s office, Pugel said, she moved swiftly and was able to secure two spots at a Rechnitz-owned facility in Fortuna.

2 thoughts on “Schlomo Rechnitz “the Philanthropist” Can’t Give’em Away – Nursing Homes…

  1. so i dont get it the last paragraph said that rechnitz company worked with the fsmilies for a new location and they admit that there are staffing shortages

    so why this dammed if you keep it open you blame him and if you close it you blame him

    seems to me the state should provide inmates to care for the patients as community service and we could solve this


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