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Kaleida looking to sell HighPointe on Michigan

Long-term care facility losing millions
Posted at 2:47 PM, Feb 11, 2020

BUFFALO, N.Y. (WKBW) — Kaleida Health is telling employees the Medicaid burden is forcing the potential sale of HighPointe on Michigan, its long-term care facility in downtown Buffalo.

7 Eyewitness News obtained an employee email issued by Kaleida president and CEO Jody L. Lomeo -- who announced last month that he is retiring at year’s end -- that appears to be sent to all employees.

Titled, “The Challenging Year Ahead,” Lomeo refers to the $2.5 billion in Medicaid cost cuts that a task force proposed by Gov. Andrew M. Cuomo will try to find for the upcoming state fiscal year.

Finding such savings, Lomeo states, would -- if there were an across-the-board cut to all Medicaid payments -- create a 10 percent cut in payments to every hospital and nursing facility in the state.

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Outside HighPointe on Michigan in Buffalo.

The email states that Kaleida’s revenues are “stagnant” and discusses the reduction of expenses, including the possible sale of the HighPointe facility.

“Consider this fact,” Lomeo writes. “HighPointe on Michigan has lost $80 million since it has opened in December 2011...Therefore, we have begun the process of identifying qualified operators/buyers for our long-term care service line.”

Michael P. Hughes, senior vice president of Kaleida, confirmed in an email to 7 Eyewitness News that Kaleida is looking to sell HighPointe.

“As far as HighPointe is concerned, due to financial, legal and risk issues, we are looking for a qualified operator to continue long term care operations at that site,” Hughes wrote. “Someone who does this as their core business; at Kaleida Health it represents less than 3% of our overall revenue. So, to reiterate and to be clear, there is no sale, we have no buyer. We have begun a process to identify a potential qualified operator.”

Potential Medicaid cuts from both the state and federal governments would be a major challenge in Erie County, government officials say.

County Executive Mark C. Poloncarz said they need to ensure there are enough beds for those in need of long-term care.

"We certainly don't want nursing facilities to close in our region,” Poloncarz said. “Because we need the beds. There are more people that need that extended long-term care or even temporary care in a facility like a nursing facility that they can't get elsewhere."

There are 50,000 more people in Erie County on Medicaid today than a decade ago, Poloncarz said.

7 Eyewitness News tried to speak to those entering and leaving HighPointe last week. Employees declined to comment, but one staffer said the possible sale was the "talk of the building."

The union that represents Kaleida workers -- CWA Local 1168 - posted a video on its Facebook page Tuesday after marching into Kaleida's executive offices to get answers. Two administrative leaders listened to a more than 30-minute peaceful plea about patient safety.

One staffer said cutting a blood bank at John R. Oishei Children's Hospital would be “petrifying”. In December, 7 Eyewitness News reported on Kaleida’s plans to cut more than 109 technical clerical clinical jobs.