Ballou Home to close
After proposed sale nixed by state health director, 120-year-old facility will shut doors
WOONSOCKET – Just weeks after the Rhode Island Department of Health blocked the sale of the financially troubled Ballou Home for the Aged, the operators of the venerable nursing home have announced they’re shutting it down.
Unable to find another buyer and projecting continued financial losses, the home’s board of directors was granted permission by RIDOH to proceed with the shutdown on Aug. 26, according to Joel K. Goloskie, Ballou’s legal counsel. News of the request had not been previously reported.
Executive Director Barry Zeltzer is now working with the state Long Term
Care Ombudsman to ensure a safe and orderly transition of 24 residents of the Ballou Home, located at 60 Mendon Road, to other facilities. If all goes according to plan, the Ballou Home will be closed by Sept. 30.
“The decision to close the Home was not made lightly,” the board said in a prepared statement. “Due to a combination of factors, we have been subsidizing staggering financial losses over the last several years and, even though we are a nonprofit entity, we did not feel that it was appropriate to sustain such tremendous operating losses any longer.”
The Ballou Home employs about 70 full and parttime workers, most of whom have agreed to stay on until all of the residents have been relocated.
“There are no words to express how grateful we are for the ceaseless dedication of our staff,” Zeltzer said. “We’re saddened that we could not find a buyer for the home, but the market realities are what they are.”
Zeltzer said the Ballou Home is working to “ensure that every resident finds a placement at a facility of their choosing, that best suits their needs,” and that “resident safety and comfort” will continue to be the Ballou Home’s “top priority.”
One figure that’s been bandied about by critics of the now-scuttled sale of the Ballou Home was that it had some $7 million in cash reserves in the form of an endowment that were available to carry on.
Goloskie declined to give a figure, but he said a good deal of those funds have already been expended on patient care.
What’s left of the endowment will be used to launch a philanthropic organization to support the Ballou Home’s 120-year legacy, Goloskie said. The new organization will make cash awards to nonprofit entities dedicated to the welfare of the elderly.
Among the factors working against the sustainability of the Ballou Home were location, layout and – most recently – the pandemic, the operators said.
With just 43 beds, it wasn’t big enough to take advantage of the economies of scale that help keep larger nursing facilities solvent – especially in a region of the state where new patients are more likely to be on Medicaid than private-payers. And with patients on two floors, the Ballou Home needs two nursing stations, which drives up overhead.
The home’s location on the Massachusetts line wasn’t helping the Ballou Home’s efforts to maintain a healthy census, either, the operators say. There are many more centrally-located facilities patient families can choose that are easier to travel to for regular visits.
And just as the pandemic has served as a bane for other nursing facilities, COVID-19 has slowed the intake of new residents. During the early days of the pandemic, nursing homes and other grouplife settings were among the hardest hit – some in the Blackstone Valley lost dozens of residents to the virus. As a result, more seniors who might be candidates for a nursing facility are opting to make arrangements to get the medical care they need in their own homes.
The board’s decision will bring to an end a tradition in
elder care widely regarded as one of the best in the region.
Established in 1900, the Ballou Home was named for its founder, Harriet Blake Ballou, whose stated mission was to serve “indigent men and women of American birth and correct habits,” the facility’s website says. The Ballou Home had a fivestar ranking from the government and U.S. News and World Report gave it a “best nursing home” accolade in 2020 – an achievement it reserves for the top 2 percent of all nursing facilities.
With help from a national consultant, the Ballou Home – until a few weeks ago, anyway – thought it had found a buyer willing to take on the financial risk of continuing to operate facility, but RIDOH would not allow the sale to be finalized.
The buyer was Menachem Yifat, the lead principal of the Onyx Healthcare Group, which operates the 163-bed Foltsbrook Center for Nursing and Rehabilitation and its sister facility, Foltsbrook Assisted Living, both in Herkimer, N.Y. After a lengthy application process and a series of hearings, the state Health Services Council recommended approval of Yifat’s application to purchase the Ballou Home for $500,000.
The HSC routinely solicits feedback from various stakeholders when healthcare organizations change hands, and the agreement between Yifat and the Ballou Home drew sharp criticism from by LeadingAgeRI, an advocacy group that represents nonprofit nursing homes. James Nyberg, the executive director, argued that the sale price was far too low and questioned why Ballou wasn’t using its presumably healthy endowment of $7 million to underwrite patient costs.
Brian Lamoureux, another lawyer who was representing the Ballou Home in the transaction, defended the board of directors, however. Lamoureux said the board had exercised exceptional
due diligence and conducted extensive market research before reaching the conclusion that Yifat’s offer was fair.
Despite the Ballou Home’s efforts, not one nursing home entity in Rhode Island was interested in buying it.
“Stated differently,” Lamoureux said in a letter to Nyberg, “Not one of LeadingAge’s 40-plus members saw fit to submit an offer...at any price.”
Ultimately, the sale of the Ballou Home foundered not on Nyberg’s concerns, but those of Health Director Dr. Nicole Alexander-Scott.
On July 9, Alexander-Scott rejected the HSC recommendation and informed Yifat that she had denied his petition to acquire the Ballou Home, known as an application for change of effective control. The health director said Yifat made misleading statements, orally and in writing, during the application process, by
failing to disclose patient care issues at facilities under his control in New York.
After the hearings concluded on June 22, Alexander-Scott said the HSC learned that, just weeks earlier, the Foltsbrook nursing home had been cited by the New York Department of Health because a patient had suffered seconddegree burns after having been served food and beverages that were microwaved improperly. The incident happened on multiple occasions, the health director noted.
Also, the HSC learned that health regulators in New York State had reached an administrative settlement with Foltsbrook in 2018 that led to an $85,903 fine and the twoyear suspension of its accreditation privileges for a healthcare training program known as NATCEP, which stands for Nursing Home Training and Competency Evaluation Program.
“Your June 22, 2021 failure to disclose to the Council the NYS stipulation and order, a substantial enforcement action that included sanctions extending into 2021, is considered by RIDOH to be misleading by omission,” Alexander-Scott wrote in the denial letter, “In the context of that proceeding it is my opinion that this constitutes material misrepresentation to the members of the Council about the past status of the facility’s license.”
Even after the health director’s decision, the Ballou Home’s board of directors continued to look for a potential buyer.
“Undeterred, we continued to try and find anyone interested – including other nonprofit and forprofit health care operators and owners in Rhode Island – but despite these entities advising us how wonderful our home and staff were,
they made no offers due to our dire financial condition,” the board said.
That left the directors with what they called “the heart-wrenching decision to close the Home.” Given the perfect storm of challenges they were facing, the board concluded that the operational model that had worked for the Ballou Home for more than a century “was no longer viable.”
“We intend to use the proceeds of our sale and savings to continue the Ballou name and legacy as a charitable, grant-giving foundation which will continue to serve the very same population the Home has helped for 120 years – our elderly,” the board said. “We take small solace that the spirit of Ballou’s mission will carry on for years to come.”