Private Rooms Kickstart Shift to Home-Like Setting for Nonprofit SNF Operator A.G. Rhodes

Georgia nursing home provider A.G. Rhodes will make private rooms a requirement for future builds at its three campuses, a plan 10 years in the making and further propelled by the pandemic.

Just this month, the nonprofit operator announced a $35 million plan to transform its Marietta campus to include private rooms through new construction and renovation.

Dubbed Legacy of Care, Marietta building plans include a new skilled nursing and memory care community, along with renovations to its existing building. 

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A.G. Rhodes CEO Deke Cateau said the Atlanta flagship home will likely be the next campus to get private rooms, while the third campus at Wesley Woods “poses certain challenges” as the nonprofit has a land lease with Emory University.

Still, the nonprofit will continue to work toward private room accommodations for its communities.

“I think we have to look at new models of care, we have to look at the markets in which each of these homes operate,” Cateau said. “Prior to Covid we operated at 95% occupancy … we think private room accommodations allow us to get back to those high occupancy numbers and as a nonprofit be able to serve more people in these markets.”

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Construction on the Marietta campus is set to start in the spring of 2022, with an anticipated completion in summer of next year. The operator is set to break ground as early as mid-May, Cateau said, raising close to $10 million for the project.

“That debt piece is also going to dictate how soon we’re able to look at our other two campuses,” Cateau said.

A.G. Rhodes is interested in deepening its connection to the Atlanta metropolitan area before looking outside of the state or other regions in-state, Cateau added.

Legacy of Care

Private rooms will help with future disease and the possibility of an endemic state for COVID-19, Cateau said, but the transition also serves to honor the dignity of residents as they age.

The operator’s whole person directed care philosophy is carried out in private room design too, Cateau said.

“You don’t just have the large communal rooms … the residents are able to have personalized space, which is so difficult in a semi-private room,” Cateau said. “Quite honestly, A.G. Rhodes has always been an innovator in care. We want this to serve as a model that’s replicable throughout the region and throughout metropolitan Atlanta.”

The capital project consists of a new three-story, 75,000-square-foot building with 72 private rooms divided into six households, Cateau told Skilled Nursing News.

Each household will have residential-scale kitchens, living rooms and laundry rooms.

Renovations will transform short-term care, semi-private rooms into 58 private rooms, expand physical therapy space and expand existing kitchen and laundry facilities, administrative offices and storage.

A number of factors worked in the nonprofit’s favor, according to Cateau: available land, a campus focused on person-directed care and administering dementia care training to staff, as well as a need for affordable memory care in the community.

The nonprofit doesn’t have to obtain a new Certificate of Need (CON), Cateau said. Current occupancy remains at 130 beds, and 72 of those 130 are carved out for its private room plans.

“We’re building out the new memory care center with those 72 beds, and then we’re coming back into the existing building and renovating it to be all private rooms as well. At the end of the day, we will have a total of 130 private rooms,” Cateau said.

Current capacity is 125; that number continues to decline as the organization takes semi-private rooms out of commission, noted Cateau.

A.G. Rhodes and the evolution of nursing homes

Nonprofit status and deep roots in Atlanta gives the operator a “distinct advantage” over competitors in the market, Cateau said, in addition to its evolution toward a more home-like setting starting with private rooms and the household model on the Marietta campus.

A change from semi-private to private rooms is so much more than an updated design – it’s a reflection of the change in the industry’s culture and of what’s expected in a nursing home, Cateau said.

Community preference is, as the industry knows and Cateau confirms, moving away from hospital-like institutional settings built between the 1950s and 1970s.

“The story of A.G. Rhodes is so representative, so emblematic, of the story of nursing homes in general. The evolution of A.G. Rhodes the evolution of nursing homes,” Cateau added. “[We have] been on this journey for such a long time, trying to change that perception of the industry. This new project is simply another representation of that, moving away from the long corridors, long hallways and other relics of the traditional model.”

A.G. Rhodes is one of the first nursing organizations to be licensed in the state, with the first of its three locations constructed in 1904. Atlanta businessman and community leader Amos Giles Rhodes donated the land and funds. Today A.G. Rhodes facilities serve more than 1,100 seniors across the Atlanta metro region.

Cateau said one of the biggest challenges facing nonprofit SNFs is access to capital, but philanthropy helps fill in the gaps.

It can sometimes be a tradeoff, Cateau reasoned, since A.G. Rhodes’ nonprofit status offers products and services not usually found in for-profit institutions – the operator offers music therapy and horticultural therapy programs, not reimbursable by Medicare or Medicaid.

The A.G. Rhodes board of directors challenged clinicians and administrators to think about what programs might help its population the most.

“The involvement of our board as a nonprofit is so important. Our board chair challenged us to think about who the most vulnerable of the populations we serve were,” said Cateau, referring to the great-great grandson of A.G. Rhodes. “We, like many nursing homes, were very involved in rehabilitation care quite honestly because that helped the economies so much. He challenged us to think more mission driven than that.”

Private rooms for the Medicaid population

While Cateau said the return on investment for private rooms has been more immediate for private pay, he believes A.G. Rhodes will see returns despite its campuses largely serving Medicaid residents.

Cateau will leverage the operator’s nonprofit status to fundraise to supplement construction costs.

“Medicaid does not pay for private room accommodations. I suspect we may see more of this coming to incentivize providers to look into this safer and more dignified model of care,” Cateau said. “This is the wave of the future. We are happy to be among the first to do it. And again, let’s be clear to do it for largely Medicaid populations.”

Looking at aging populations in Georgia and across other states, Cateau believes private rooms will be needed for residents requiring certain types of care, like those with dementia.

Once the Legacy of Care project is completed, A.G. Rhodes will be able to administer memory care and outpatient services – in private rooms – to nearly 500 seniors every year. The project will also expand employee training and retain 167 full-time staff while creating new full-time positions.

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