St. Olaf Lutheran Church in north Minneapolis announced Friday that it will close its 80-bed nursing home in late November, citing recurring financial losses and an inability to attract enough residents to an aging facility.

Shuttering the three-story nursing home, which opened in 1964, will affect a diverse mix of about 50 mostly low-income residents, including frail seniors and younger people with physical disabilities. The church will continue to operate a smaller, 48-unit assisted-living center on its campus at 2912 Fremont Av. N.

The Rev. Steve Lomen, pastor at St. Olaf Lutheran Church, said the nursing home had long been a destination for elderly and disabled people being discharged from Hennepin County Medical Center, North Memorial Medical Center and other metro hospitals. However, in recent years, patients and hospital discharge planners had increasingly chosen newer senior homes in the suburbs. The St. Olaf nursing home had lost money each of the past five years and needed to make millions of dollars in renovations to stay competitive, officials said.

“Part of it is that north Minneapolis is often panned as the most dangerous part of town,” said Lomen, who has lived in the area since 1997. “We had an aging facility, and we didn’t have deep enough pockets in place to make this viable and attractive.”

The closure comes amid a deep and long-term contraction in Minnesota’s skilled nursing home industry. As more frail and elderly people are cared for in their own homes or in assisted-living centers, fewer people need to spend time in nursing homes. About 70 nursing homes have shut their doors in Minnesota since 2000, and overall, system capacity has shrunk by nearly a third since 2000, from 43,000 beds to 29,600 beds statewide.

After intense lobbying by the nursing home industry, the Legislature this year agreed to provide $138 million in new funding over the next two years and to reform how nursing homes are reimbursed.

“It’s a tough marketplace,” said Craig Abbott, chief executive of Health Dimensions Group, a Minneapolis management and consulting firm that was brought in this year to manage St. Olaf Care Center and which also manages the church’s assisted-living center, known as North Oaks on Emerson. “There are a lot more options for seniors, and that includes being serviced at home.”

Last year, the Minnesota Department of Health seized control of the Camden Care Center, an 87-bed nursing home near St. Olaf church, after state inspections revealed more than 80 health and safety violations. Regulators found that two residents required hospitalization after accessing drugs or alcohol while under care of the nursing home.

Abbott said St. Olaf is considering plans to convert part of the nursing home into about 20 to 25 assisted-living units once it is closed.

 

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