Why Are More Than 200 Beds Empty at This San Francisco Nursing Home?

As one of the city’s remaining nursing homes prepares to close in April, nearly 250 beds are currently sitting empty in San Francisco’s largest public skilled nursing facility.

Following a multi-year scandal that nearly shuttered the more than 150-year-old facility, Laguna Honda Hospital and Rehabilitation Center resumed admitting new patients last July after two years of internal reforms and working with federal officials to make good on past infractions.

Now, the beleaguered nursing home is back open for new residents. However, admissions are off to a slow pace as Laguna Honda remains under the microscope of state and federal regulators despite a growing need for skilled nursing care in San Francisco and across the region.

“It is a well-known fact that there is a dearth of nursing home beds in San Francisco,” said Tony Chicotel, an attorney with California Advocates for Nursing Home Reform. “It’s jarring that the facility is allowed to admit residents now and still has so many open beds when we hear from people all the time in the Bay Area that there is no nursing home space for people to go to.”

Nursing home experts say San Francisco has a large population of low-income seniors who need round-the-clock care in their community, and many people have to move out of the county away from loved ones due to the region’s scant affordable nursing home options.

The need is about to get compounded as dozens of elderly residents at St. Anne’s Home on Lake Street near the Presidio will need to find new housing before the facility closes on April 8 due to staffing shortages.

Laguna Honda is working with St. Anne’s to bring over residents who are about to lose their homes and has offered beds to past residents who were discharged during Laguna Honda’s recertification process.

“I know this is a challenging time, and you have my commitment that the city will support you in this transition,” Mayor Daniel Lurie said at a recent Board of Supervisors meeting, addressing the closure of St. Anne’s. “We must have a broader strategy for seniors to live safely and actively engaged in their community.”

There are currently 435 residents at Laguna Honda, compared with the hospital’s licensed bed capacity of 649. The hospital previously had a capacity for nearly 800 residents. However, federal regulation changes after the pandemic required rooms to have no more than three residents, stripping the hospital of 120 beds. Officials at Laguna Honda said they are trying to recertify the 120 beds to bring capacity back up.

Laguna Honda has welcomed a total of 78 new residents out of 179 referrals since resuming admissions on July 31, 2024, according to San Francisco’s Department of Public Health.

The majority of denials were due to patients deemed to have “behavioral health needs too complex” for a nursing home, including substance use or mental disorders. Others were due to being “too medically complex” and for needing lower levels of care than residential skilled nursing, according to a report shared at the Health Commission meeting on February 3.

However, Laguna Honda officials say they are actively welcoming new residents and that there is no waitlist for those who meet its criteria, with a goal to fill the remaining beds by December 2025.

“We are admitting anybody who meets the criteria to be in a skilled nursing facility, and we are ramping up admissions,” Laguna Honda CEO Diltar Sidhu told KQED. “Laguna Honda is back.”

New patients at Laguna Honda must meet industry-standard nursing home criteria, including being a resident of San Francisco whose primary diagnosis is a medical condition — not psychiatric — who requires nursing facility care, physical or cognitive impairment requiring higher attention than a lower-level board and care facility, or daily rehabilitation.

However, after several years of intense oversight, Laguna Honda is taking caution as it moves forward. Officials must walk a fine line to remain in good standing with regulators while responding to the community’s needs in a timely manner. Bringing on new patients is also necessary to receive federal dollars for patients, especially as the city faces a nearly $800 million budget shortfall.

“With every bed that sits empty, that’s also reimbursement we aren’t getting, so it’s also a financial issue during a tough budget season,” said Supervisor Myrna Melgar, whose district encompasses Laguna Honda. “I’m hoping the pace of admissions is at least maintained.”

Laguna Honda was already under intense scrutiny following a massive abuse case affecting nearly 130 patients from 2016 to 2019. Then, in 2022, after two nonfatal overdoses took place at Laguna Honda, the hospital failed to pass a series of inspections and lost its standing with Medicare and Medi-Cal, which covers the vast majority of patients at Laguna Honda.

“They have to be very careful about people who have behavioral problems,” said Teresa Palmer, a retired physician at Laguna Honda and nursing home advocate. “In a traditional nursing home with frail elders, you need to protect them.”

A lawsuit against the hospital over deaths and poorly managed discharges during the recertification process is still active.

“The number one issue was that we were admitting dual-diagnosed patients and running Laguna Honda like a hospital instead of a nursing home, which is the license we have,” Melgar said. “So that got us into trouble in the first place. They dinged us.”

The empty beds sit at Laguna Honda as Lurie has vowed to open up more treatment facilities and various types of behavioral health and emergency shelter beds. But those efforts are separate from the skilled nursing beds available at Laguna Honda specifically for “traditional” nursing home patients — such as elderly people with chronic illness, dementia and other acute medical or rehabilitation needs.

Still, these are not mutually exclusive populations in need of round-the-clock care. Seniors make up the fastest-growing portion of the homeless population, and substance use disorder exists across age groups and other demographics.

People who primarily need medical skilled nursing care but also have behavioral or mental health challenges can be admitted, officials said.

“From the perspective of maintaining the federal certification and not creating any waves that could cause more regulatory scrutiny, it would be smart to admit a more traditional nursing home resident,” Chicotel said. “But from the perspective of an institution that is set up to care for the vulnerable residents of the community, I would think they would welcome residents who have skilled nursing needs and other needs as well.”