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Needing to cut costs, Blue Ridge CEO gives up his own job

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Chris Oswald

Chris Oswald, CEO of Blue Ridge Village

MARTINSVILLE — The chief executive officer of Blue Ridge Village, which includes a nursing home and an assisted-living facility, is stepping down after 18 years in that position.

CEO Chris Oswald said he fired himself as part of an effort to cut costs to help offset a decline in revenues resulting from what he calls the privatizing of Medicare.

Blue Ridge Village includes Blue Ridge Rehab Center, which is licensed for 300 beds and provides rehabilitative therapies such as physical, occupational and speech therapy, and Blue Ridge Manor, an assisted living facility licensed for 60 beds.

Speaking about Blue Ridge Rehab Center, Oswald said, “For really the last 20 years, we have averaged 284 residents on any given day here at the facility, but in the last six months specifically, because of the changes that have happened in Medicare in terms of the introduction of private insurance, they have taken over Medicare. They now control how many days and how much we get paid for residents. They’re not allowing residents to stay as they did historically.”

He added: “Many residents who stayed 50, 60, 70 days and benefitted from therapy or clinical services are now being forced to leave after 14 or 21 days because the insurance company won’t pay us any longer than that. So it has created a tremendous turnover, number one. But it also has created a real void in terms of being able to replace those residents at a really three times multiplier to break even. It has reduced us — today our census is 227. So we’re over 50 residents on average down on any given day, and that equates to $3 million in revenue a year that we don’t have that we had as recently as two years ago.”

Total revenues have declined from previously about $15 million a year, until now a lot closer to $12 million a year, Oswald said.

He added: “Instead of taking the normal course of action, which would be to cut staff and cut wages, we’re committed to providing quality resident care. We’re unwilling to take that route. So we have to look to other areas that don’t directly affect patient care. I can’t see how you don’t start at the top. So although we’re going to continue to have a licensed administrator running this building (Blue Ridge Rehab Center) and a licensed administrator running Blue Ridge Manor, there will not be the CEO position that was of such value over the years…. We’ve been financially unable to continue to do that.”

“So unfortunately you could say I fired myself in order to try to meet the challenge, along with some non-patient-related areas that we made some cuts,” Oswald said. “We’re going to continue to operate until such time as we can generate additional revenue through some plans we have in place, such as behavioral and mental health care, some other niches that may bring us additional residents.”

He said the company is negotiating better terms with vendors, negotiating different pricing with providers that partner with the company, and negotiating a possible lease reduction from the lienholder. The company also plans to make some additional layoffs — about half a dozen employees in non-patient-related services.

Oswald said he hopes all the cuts together will save $300,000 to $400,000 a year, which he believes should allow the company to at least break even while continuing to provide good quality care until such time as it can generate revenue sources.

He said the company already has cut about half a dozen positions (in non-patient-related areas) in the last year or so.

When asked what impact the cost-cutting moves will have on patient services, Oswald said: “We’re hoping that the change is going to be seamless in terms of what the public would see in terms of provision of care. We don’t expect any patient care to suffer. We’re hoping in the long run we’re going to be stronger for the change, and as soon as we’re able to generate more revenue through adding a wing of behavioral/mental health care or any other number of other options we’re exploring, the facility will be brought back to the standard it once was.”

He added: “This is not a Blue Ridge problem. It’s not a Martinsville problem. It’s a nationwide problem. The top two providers of nursing home care in the country in terms of numbers have just gone bankrupt, and many more are going to follow because of the endemic change in the way services are provided by Medicare and Medicaid. So you’re going to see a dramatic shift away from long-term care and into either the home through home health or you’re going to see a shift into more privately funded care models like assisted living. In five years, to be honest with you, … you will not recognize the nursing industry for what it is now, because it will be dramatically changed.”

Oswald said Medicare in particular has become too large an expense percentagewise based on the gross national product.

“An escalating amount of money is going out of Medicare for what we have coming in. The percentage is climbing,” Oswald said.

He added that Medicare and Medicaid are being called “entitlements” now, and both Democrats and Republicans are talking about how to cut entitlements, (saying), “It’s too large. How do we slow that down?”

“Unfortunately one of the ways they’ve done it is they’ve privatized Medicare,” Oswald said. “People don’t know it. They won’t know it ’til they need it. Medicare used to be a strictly federal government-managed program. Now it’s not. It is privatized. Humana, Anthem, United Health Care, they are all operating Medicare now and they have control of it. Their mandate is to save expense and they’re doing that by cutting the number of allowable days or what’s being paid to long-term care facilities. That’s what’s causing the huge shift in nursing homes’ ability to continue to staff (fill) their buildings with residents.”

Oswald also said: “When I was asked to come up here full time, it was for one year back in the year 2000. I’m still here. I have been adopted by Martinsville and Henry County and have become a big part of the day-to-day goings on in this town. It is a really sad day for me both personally and professionally to step down from what has really been the perfect job.”

He added: “We’re not perfect. We face many challenges on a daily basis to provide good quality care. We have over the years developed an excellent staff who has worked tirelessly to take care of the individuals that have taken advantage of our services, which are all from Martinsville and Henry County. It’s with a heavy heart that I am stepping down, but a necessary step in order to continue to provide great services.”

Oswald is 58 years old.

When asked about his future employment plans, Oswald said he’s been at Blue Ridge Village so long he doesn’t even have a resume.

“I really don’t know what I’m going to do right now. I’m hoping to stay within in the industry and I am hoping to stay in the area. As we know, it’s going to be difficult to do that because of the employment situation that is southwestern Virginia. The first challenge is to see if there is anything within in a 60-mile radius that could benefit from my service and experience. If not, I may have to relocate, but I’m going to miss it.”

Tilisa Riddle-Roberts, marketing director for Blue Ridge Village, said for “our staff and residents, Chris has set the bar.”

Paul Collins reports for the Martinsville Bulletin. He can be reached at paul.collins@martinsvillebulletin.com

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