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Medicaid payment rates blamed as rural nursing home closures pick up pace in Nebraska

LINCOLN — The September announcement of the Blue Hill Care Center’s planned closing hit Brenda Trumble hard.

The home’s closure would have forced her 90-year-old mother, Lois Mohlman, to leave the south-central Nebraska town where she had lived for more than 30 years.

Trumble would no longer be able to pop in and see her after work or supper. Relatives would have had a longer drive to visit. The workers caring for Mohlman would no longer be neighbors and friends.

But the family would have had little choice. With growing dementia and a history of wandering and falls, Mohlman needed nursing home care, and the next closest home was more than 20 miles away.

Trumble and her mother were spared the upheaval after the town of Blue Hill successfully fought to keep the home open.

But 14 other nursing homes — all but one in rural counties — have closed in Nebraska this year. That’s more than twice the number in 2018, which itself set a record.

A total of 34 Nebraska nursing homes have closed during the past eight years. All but two were in rural counties.

The trend worries nursing home associations and advocacy groups alike, especially as they look ahead to the baby boom generation reaching advanced age. And some state senators say Nebraska needs to be looking at ways to keep rural homes open.

“Where in the rural areas of the state are people going to have to go to get care?” asked Heath Boddy, president and CEO of the Nebraska Health Care Association, which represents the majority of Nebraska nursing homes. “The care is findable. What I’m worried about is finding it in a reasonable distance.”

Jina Ragland, associate state director for AARP Nebraska, said the advocacy group has heard from families with problems finding nursing home care in their area. She said some people have ended up hundreds of miles from home, where maintaining connections with spouses, as well as other family and friends, is difficult.

“It’s not just a short drive down the road,” she said.

Rural nursing homes are struggling across the nation. More than 440 rural homes have closed or merged over the past decade, according to a New York Times report that cited the Cowles Research Group. The vast majority collapsed for financial reasons.

That’s true in Nebraska as well, Boddy said.

He and Jenifer Acierno, president and CEO of LeadingAge Nebraska, which represents nonprofit homes, place most of the blame on Medicaid payment rates that fall well short of covering costs.

Nebraska Medicaid rates averaged $36 less per day than nursing home expenses in 2017, according to the American Health Care Association.

The shortfall narrowed to about $30 per day this year, after state lawmakers boosted funding by nearly $14 million. About $6.4 million is state dollars, with the rest coming from the federal government.

Although state Medicaid officials have kept back some of the funds for contingencies, Boddy called the increase “a wonderful step forward.”

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Yet it has not been enough to stem the tide of closures.

“We’ve just reached a point now where those operators can’t sustain it anymore,” Acierno said.

State Department of Health and Human Services officials did not respond to questions posed early last week about the level of nursing home rates or about whether the agency has concerns about rural nursing home closures.

Typically, nursing homes have made up for low Medicaid rates by charging more to private pay residents. But the strategy does not work as well when the Medicaid shortfall grows and when there are not enough private pay residents.

While urban homes may limit the number of Medicaid residents to keep their books balanced, rural homes are less able or willing to do so. As a result, Nebraska’s rural nursing homes have about 65% of residents on Medicaid, compared with 53% statewide.

Boddy said that Medicare payments also used to help homes manage. But Medicare, which never paid for more than a limited amount of nursing home care, has tightened up its payments recently.

In addition, rural homes struggle with a tight labor market and low occupancy rates, which are driven by a push for less costly alternatives such as in-home care and assisted living.

But Trumble, while searching for a place her mother could go, found that the recent nursing home closures are sending occupancy rates back up.

She also found that empty beds do not necessarily equal access to care. Some homes refused to take her mother because of her wandering. Other beds did not fit her mother’s needs. They were for men or for people with higher or lower needs for care.

Marty Fattig, chairman of the state’s Rural Health Advisory Commission and CEO of the Nemaha County Hospital, said hospitals are starting to run into difficulties finding places for patients to go.

Along with affecting residents and their families, nursing home closures are a major blow to small towns. In Blue Hill, the nursing home has been among the top employers in town, said Mayor Keri Schunk. The home has about 43 employees.

“It was going to be devastating to our community,” she said.

So Schunk, Trumble and other Blue Hill residents mobilized as soon as word of the pending closure got around. They held public meetings and created a committee to explore options, such as finding a buyer for the home or a company to manage it.

In the end, Azria Health, the company that owned Blue Hill, reversed course on its plans to close the home. The company went ahead with closing homes in Milford, Columbus and Utica.

State Sen. John Stinner of Gering, the Appropriations Committee chairman, said the situation is becoming critical for rural Nebraska.

He said the state needs to explore ways to keep nursing homes open so Nebraskans can get care close to home. One model might be the federal program that designates certain hospitals as “critical access hospitals.”

Better Medicaid rates also would help, he said. To close the gap between Medicaid rates and nursing home expenses could cost about $66 million, including about $30 million in state funds.

“This is a crisis that needs some kind of resolution,” he said. “We’re still a long way from breaking even.”

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How can Nebraska reverse 'brain drain'? Start with communities 'that people want to live in'

NORFOLK, Neb. — Mike Flood says the young people who work for his media and communications company in this city of 25,000 love their jobs — until right around 6 o’clock on Friday night.

“And then it’s them at Mel’s drive-in bar with 40-year-old divorcées,” Flood said. “When you’re 24, you’re not thinking about Mel’s bar on East Norfolk Avenue. You’re thinking, ‘Am I going to get married someday? Am I going to meet people of the opposite sex?’ This is about biology. And these are the facts.”

Flood recently drew big laughs when he told that story during an economic development conference in Omaha.

But he was also making a serious point about the challenge Norfolk, Omaha and communities across Nebraska are confronting as they seek to attract the workers they need to fuel the state’s economic growth and future. And Flood offered an equally serious plan for his city to do something about it.


“We’re not trying to be Omaha or Lincoln or Dallas,” Mike Flood said. “We’re trying to be something more than Norfolk is right now.”

Under artists’ renderings, this future Norfolk would feature an attractive riverfront entertainment district on the waterway that gave the city its name. It would be a vibrant area lined by bars and restaurants and other entertainment hubs, a modern office park, trendy housing and spots to recreate on the river.

The vision is that this appealing new place to work, live and play would help Norfolk lure a new generation of young people — workers and entrepreneurs who discover they no longer have to leave northeast Nebraska to find the jobs and lifestyle they desire.

While Norfolk’s dream is unique, the aim and ultimate goal are not.

Across Nebraska, communities are investing big in new public amenities and attractions and promoting entertainment districts and neighborhoods with sizzle as they seek to keep and attract young, tech-savvy workers.

From the nearly $300 million-plus riverfront redevelopment in Omaha and expansion of Lincoln’s Haymarket to new brewpubs, cigar bars and downtown housing in places like Norfolk, Hastings, Beatrice and North Platte, cities are looking to make themselves more appealing places to live.

Their main target is young professionals ages 20 to 34, a demographic nationally that’s much coveted, mobile and can choose to live anywhere.

The millennial generation that came to adulthood in this century is looking for communities that are walkable, aesthetically pleasing, socially engaging and open, said Dave Rippe, the former director of the Nebraska Department of Economic Development and now a developer in Hastings.

Rippe said for cities to thrive in a fast-changing global economy where technological change is proving to be a profoundly disruptive force, the importance of attracting that generation of workers can’t be overstated.

“It’s essential for survival,” he said.

In Norfolk, the drive to increase the city’s sex appeal among young workers and families has sparked an initiative that’s nothing short of remaking the very heart of Nebraska’s eighth largest city. What’s just as remarkable about the vision is how many of the pieces already seem to be falling into place.

Land for the new riverfront has been acquired. The city is making substantial investments in a signature riverfront park and reengineering the river to make it recreation friendly. And local businesses are showing interest in becoming part of it all.

In the end, Flood thinks the Norfolk riverfront will become a reality.

“We’re not trying to be Omaha or Lincoln or Dallas,” he said. “We’re trying to be something more than Norfolk is right now.”

* * *

A simple graph illustrates the urgency of the state’s workforce challenge.

At the height of the recession, Nebraska had almost two people out looking for work for every available job. Fortunately, as the economy improved, that employment gap narrowed and then closed by 2014.

But both trend lines continued on those same trajectories, and the problem turned on its head. By the end of 2018, Nebraska had almost two open jobs for every available worker.

Nebraska's worker gap

During the recession a decade ago, Nebraska had two unemployed workers for every available job. Now the issue is reversed, with two open jobs for every available worker. Nebraska's worker gap for it size is the fifth largest in the country.

It’s a nationwide problem, as at least 42 states likewise have more available jobs than workers. But the disparity in Nebraska is the fifth highest among the states. Iowa’s is second highest.

Part of the problem is the long-standing “brain drain” of college-educated Nebraskans to other states. Over the past decade, Nebraska saw a net loss of 16,000 college graduates 25 years or older.

And the workforce problem is only expected to grow worse. With the retirement of baby boomers, Nebraska’s working age population peaked last year and is projected to drop for the next decade. And with nearly all states competing for the same workers, there are no easy answers.

Earlier this year, state business leaders declared Nebraska’s worker shortage a crisis, saying it was forcing them to fill good-paying jobs outside the state. They called on the state’s political leaders to do more to keep high school graduates from leaving Nebraska, connect them to careers, step up training of underemployed workers and sell out-of-state workers on making their lives in Nebraska.

But the drive to tackle the workforce problem goes beyond education and job training. Quality-of-life issues have also been stressed as critical to helping attract the workers Nebraska needs.

“There’s a lot of talk right now about workforce training and affordable housing, like those things are the silver bullet,” Norfolk Mayor Josh Moenning said. “Well, if you don’t have a community that people want to live in, that stuff doesn’t matter.”

Indeed, Blueprint Nebraska, a public-private initiative that lays out a 10-year economic development strategy for the state, earlier this year called for rejuvenating communities, town centers and meeting places with “targeted investments” in the arts, entertainment and recreation.


Norfolk Mayor Josh Moenning came into office three years ago with a dream of redeveloping the downtown area along the river where Norfolk was born in 1866.

The goal, the report says, is making Nebraska “the best place to live, work, raise a family and play in the Midwest.”

There was a time when spending public dollars on such things would be seen as nice but a little frivolous.

“Not anymore,” said Gary Person, president of North Platte’s chamber. “It’s a whole different mindset, different generation out there.”

In Omaha, the idea of investing in public amenities to attract young talent is hardly new.

In 1999, a consultant brought in by Omaha business leaders said the practical, hardworking city needed to kick off its shoes and dance around a bit. If the city wanted to attract the young, tech-savvy professionals needed to fuel job growth in the new millennium, it needed more sparkle, whimsy and fun.

It was a new way of thinking that helped spur the construction of a new arena and convention center, renovation of old warehouses into attractive spaces for entrepreneurs and business startups, and the transformation of the city’s industrial, polluted and junky riverfront with parks, public gathering spaces, trails and an eye-catching pedestrian bridge.

Now city leaders and philanthropists are doubling down on those efforts with a complete overhaul of three riverfront and downtown parks. The nearly $300 million plan, nearly entirely funded by donors, includes spacious lawns for events, a river promenade, an urban beach, an ice skating rink, water splash parks and playgrounds for kids, a dog park and a revamped river marina.

“They’re planning on 1,500-plus events a year in a space that is going to be as aggressively engaging as you’re probably going to be able to find anywhere,” said David Brown, CEO of the Greater Omaha Chamber. “There’s a long list of things that are happening that are focused on how can we be a place that certainly is attractive to businesses, but even more importantly, attracts talent.”

Lincoln likewise earlier this year announced an expansion of its trendy Haymarket district, the centerpiece of its efforts over the past two decades to lure young professionals.

Smaller cities in Nebraska are also getting on board.

In the past decade or so, South Sioux City has built 18 miles of paved bike paths, which just might give the city of 13,000 more miles per capita than any city in the country.

Brewpubs and microbreweries, often with encouragement from city development officials, have sprung up in recent years from Syracuse to Ord to Valentine to Alliance. Other trends have included building new housing over main street businesses, providing a slice of urban life in smaller cities, and public arts projects.

But when it comes to investing in improved quality of life, few Nebraska communities are taking a more ambitious swing than Norfolk.

It really got started about two years ago, when Flood was contacted by the Aksarben Foundation. The longtime Omaha civic organization that formerly ran Omaha’s now-defunct horse racing track was turning its focus to workforce development all across Nebraska. Flood was asked to head up a workforce working group in northeast Nebraska.

Around the same time, Flood was thinking about his own struggles to keep young workers. He came up with a plan to get several Norfolk businesses to come together on a project that would couple a modern, amenity-filled office park with attractive housing appealing to young workers.

His original thought was to build the business park on the edge of town. But when Moenning heard about it, the mayor took Flood out to lunch.

“You need to do this downtown,” Moenning told Flood that day.


Norfolk takes its name from the North Fork of the Elkhorn River.

Moenning came into office three years ago with a dream of redeveloping the downtown area along the river where Norfolk was born in 1866.

Norfolk takes its name from the North Fork of the Elkhorn River, with the town originally laid out just south of the waterway. Legend has it that the town’s German settlers attempted to register its name as “Norfork,” but it came back from the U.S. post office out east as “Norfolk.” Stubbornly, the founders’ descendants still pronounce it “Nor-fork” today.

The city’s first commercial activity was a hydropowered grain mill on the river’s south bank. For most of Norfolk’s history, the river was essentially a drainage ditch the city turned its back to.

But as far back as the 1970s, there had been talk of developing the riverfront adjacent to downtown with a small-scaled San Antonio-style riverwalk. Many viewed it as overly ambitious, and it never got off the ground.

As mayor, Moenning saw the potential in redeveloping the riverfront and embraced it. He likened it to the transformation that followed in Sioux Falls, South Dakota, when that city cleaned up and restored the nearby waterfalls from which it took its name.


Norfolk Mayor Josh Moenning walks along a part of the North Fork of the Elkhorn river that the city plans to start to revitalize.

“Reconnecting the people to the water that gave this community life is a critical part of this,” Moenning said recently as he stood on the river’s bank. “People are naturally drawn to water.”

Indeed, it didn’t take long for Flood to see it just made sense to marry his office park plan and the broader Aksarben workforce initiative with the riverfront vision.

“This is the right place at the right time,” Flood said, “because our downtown is primed for this.”

The Aksarben working group that Flood headed recently came out with a plan they call “Growing Together,” a reference to not just Norfolk but a 10-county region of northeast Nebraska.

The plan’s ambitions go beyond the riverfront and business park, calling for such things as a scholarship and internship program at nearby Wayne State College and stepped up early childhood education throughout northeast Nebraska.

The idea is that a kid growing up in nearby Battle Creek or Randolph would be given incentive to stay in the region for college, spend senior year interning at a Norfolk business, enjoy the connection to the new downtown, and decide to stay and make a life and career there.

A key piece of the puzzle fell into place in August when the local economic development authority voted unanimously to pay $3.1 million for an old 1960s-era shopping center that sits on the site of the original river mill. That’s the land slated to become home to the riverfront entertainment businesses and office park.

Other elements of the plan are progressing, too.

Across from the proposed office park on the river’s north bank, the city is planning a $3 million park renovation over the next three years to create a new public gathering place.

Johnson Park was once a city jewel, a Depression-era WPA project featuring tiered gardens that looked much like Lincoln’s Sunken Gardens. But the park flooded in the 1960s and was allowed to go to seed, largely becoming a patchy grass area with a scattering of picnic tables.

Under the city’s plan, Johnson Park would be transformed into an amphitheater for public music performances and surrounding event grounds. The park would be connected to the riverfront entertainment district across the water by pedestrian bridges, including a former railroad bridge that would be repurposed.

With the new Johnson Park, there’s no serious danger of flooding. Flow into the river channel is now controlled upriver by a gate. Even during the historic flooding in the region last spring, the river near downtown stayed within its banks.

A rendering of the possible new riverfront in Norfolk, looking south. Riverwalk entertainment businesses are just above the river and a new business park is at the center. Part of the new park is visible at the bottom right.

In another river improvement, the local natural resources district, the city and donors are combining to pay for a $3 million engineering project in the next two years that will take out a dam at the old mill site.

The dam and spillway currently create a steep 13-foot drop-off in the river. Removing that water cliff and stair-stepping the waterway will create a whitewater flow through downtown, one that would be friendly for kayaking and other recreation.

Kayaking? It’s already a thing in Norfolk. A local outfitter just upriver of the planned development has rented kayaks and tubes for the past five years.

“People’s view of the river has changed considerably since I opened my business,” said Tony Stuthman of North Fork Outfitting. “It’s a beautiful stretch of river, and it’s a half a block from downtown.”

In another step last year, a worn-out bridge over the river at Norfolk Avenue into downtown was replaced by a new ornamental one as part of a $6 million city project. Related to that, the city also spent $750,000 for riverfront recreational trails.

There’s a similar $3 million plan to replace the other river bridge into downtown, as well as plans to spend $1 million to turn another street into a green, walkable corridor between the riverfront and downtown.

In all, city investments in the bridge and street work, Johnson Park, trails and waterway improvements could exceed $15 million. Other city investments in downtown bring the figure closer to $30 million. With private investment, Flood estimates the whole project could exceed $50 million.

The Norfolk leaders are counting on the private sector to build the office park, the hospitality businesses lining the riverfront and the new housing catering to downtown workers. There has already been interest in all those things, Moenning and Flood said.

Seeing the potential, a local developer in recent years has bought land near the project site for potential new housing and development. And three businesses have expressed interest in moving to the river. 

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“When Mike first talked to me about this, I said, ‘That’s a great idea, Mike,’ but in the back of my mind I was thinking nothing would come of it,” said Brandon Day of DayCos, a Norfolk firm specializing in financial services for trucking companies. “As things have progressed, there is more and more momentum, and I really think it’s a sign of the momentum in Norfolk in general.”

Though the new office park was Flood’s idea, he ironically has decided it would be a conflict of interest for him to move his business into it. Because he’s helping to raise money for the riverfront from outside donors, he doesn’t feel it’s appropriate for him to potentially benefit from it personally. He instead plans to move his business into another building downtown.

Flood and others are seeking to raise at least $3 million privately for the riverfront and some $12 million more for the scholarship program and early childhood education elements of the Aksarben workforce plan.

In their fundraising, they’re hoping to tap the Omaha philanthropic community, Flood only half-joking when he refers to the new riverfront as “Aksarben Place.” Flood’s message is that what’s good for Norfolk is good for Omaha, too.

The Aksarben Foundation has been supportive, he said, seeing what’s happening in Norfolk as a model for other communities in the state.

In all, Flood is hoping Norfolk businesses can pack a thousand young workers in a dense area around downtown and the riverfront, creating an exciting district for young people to work, live and gather together.

Flood said he has nothing against Mel’s bar, which has long been the most popular watering hole in Norfolk. But he believes Norfolk needs much more if it’s going to keep young people and prosper in the future. He thinks Norfolk is ready to step up.

“This is the future of Norfolk,” he said. “This is what it needs to be.” 

Photos: Norfolk seeking to add sizzle to help attract young workers