Pavilions Charts New Course for Future

Following several bumpy years that included the turnover of multiple leaders, financial struggles, a lawsuit with PACE North, and staffing challenges, the Grand Traverse Pavilions is under new leadership and working to chart a new course for the future. Pavilions representatives appeared before county commissioners Wednesday to give an update on the facility, including work to improve inspection ratings, attract more residents, and become more efficient operationally.

The Department of Health and Human Services (DHHS) board, which governs the Pavilions, hired new CEO Darrell Lavender this summer. DHHS Chair Carol Crawford said the position of CEO and administrator used to be one combined role for the Pavilions, which was “too much for one person, quite honestly.” The Pavilions is the largest county-owned nursing facility in Michigan, with 240 licensed nursing beds and 79 assisted living apartments. DHHS divided the position into two jobs and chose Lavender – who has extensive healthcare industry experience – from roughly 200 applicants to become CEO, with Lavender expected to soon hire a separate administrator with a nursing home license.

Lavender said he’s focusing on four key areas for the Pavilions: quality and safety, residents first, healthcare team, and operational performance. For the first category, he noted that an October rating report gave the Pavilions five stars for staffing and four stars for quality measures, the latter of which he hoped would soon go higher. However, the facility earned only one star in the health inspection category. That brought the overall quality rating for the Pavilions down to two stars.

“That does not reflect the care or of the operations of Grand Traverse Pavilions,” Lavender said. He explained that the one-star rating is the result of the number of citations the facility receives during annual state surveys – about 18-20, he said – “some of them less serious, some of them moderately serious.” Lavender said there’s “an art” to scoring well on the surveys, with the Pavilions undertaking mock surveys with consultants to better understand how to improve its results.

However, the facility didn’t receive the results of a recent mock survey before the real survey occurred, with state inspectors coming in June instead of fall as expected. County Commission Vice Chair TJ Andrews called that timing “highly unfortunate,” but said the survey process offers an “opportunity for improvement.” Lavender said the old scores will eventually fall off; higher scores in the future will help improve the facility’s overall quality score. “We just have to do better,” he said. Lavender pointed out that the majority of residents – 88-95 percent – gave good, very good, or excellent ratings to the Pavilions in categories including overall care, discharge process, staff, and rate of recommendation.

One of the county’s largest employers, the Pavilions currently has over 365 staff members with annual wages (excluding benefits) exceeding $22 million. Talent recruitment and retention – a challenge across the industry – remains a priority and is “essential for occupancy goals,” according to Lavender. He said turnover remains below the quarterly benchmark of 10 percent and that the Pavilions is pursuing a “retire here” vision that encourages long-term, seasoned staff through aggressive retention efforts.

While net income for the Pavilions is down about a quarter million dollars through October this year, the facility is moving toward financial sustainability, Lavender said. One opportunity for improvement is increasing occupancy for the assisted living apartments/cottages, with only 59 of those 79 units filled. The Pavilions has a monthly carrying cost for each vacant unit of about $4,000, so “that adds up,” Lavender said.

Crawford said there’s been a “major shift in the industry” post-COVID in that more people “want to be in a home environment rather than assisted living.” Demand is heading in a positive direction for skilled nursing units but remains flat for assisted living, Andrews noted. Crawford said a “heavy part of our strategic planning is what we do with the cottages,” whether marketing them differently or exploring models to make them more sustainable. Lavender said he didn’t foresee closing the cottages as an option, however, as he still saw a need for such units among seniors.

In general, Lavender said the Pavilions needs to shift its “financial center of gravity away from money-losing practices toward efficient operations.” He added: “We need to end some of the drift and lead with incredible focus and directional clarity.” While the Pavilions continues to invest in its facilities – for example, digitizing medical records and putting new roofs on buildings, which it did this year – it also needs “more thought and approval and accountability” behind spending decisions, he said. “I'm a little bit more hawkish than probably the culture is used to,” he added, noting that a major organizational turnaround doesn’t happen “overnight.”

County Commissioner Rob Hentschel said he was glad to see the new direction for the Pavilions, expressing frustration that the facility is government-owned and thus not paying property taxes – while competing with private providers that do pay taxes – and yet still has struggled to operate in the black. Commissioner Darryl Nelson said he wanted to “recognize the hard work” of Pavilions leaders who have been working to right the ship.

“I like the fact that you're not accepting where you're at, and you're trending up,” he said. “I know you had a lot of challenges…this is a lot better.”