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CHI St. Francis in Grand Island announced plans Monday to close its skilled nursing facility. The closure is the latest in a nationwide trend of skilled nursing facilities closing their doors due to low capacity, transfer bottlenecks and financial issues.
"CHI Health St. Francis has made the difficult decision to close the Skilled Nursing facility, effective March 10,” CHI St. Francis President Steve Schieber said in a statement. “This decision reflects broader changes in how skilled nursing care is delivered and the increasing shift away from hospital-based skilled nursing services across the country. Our priority is supporting our patients, families and staff through a thoughtful and well-planned transition.”
CHI Health declined an interview request and did not provide further details.
Patients are typically transferred to skilled nursing facilities after a hospital stay if they need short-term, post-acute care or rehabilitation. Some – but not all – nursing homes are skilled nursing facilities. In contrast, nursing homes focus on long-term care for people with chronic health concerns, and skilled nursing staff require a higher level of training.
According to CHI’s website, the St. Francis hospital’s skilled care facility provides 24/7 nursing care, transportation to medical appointments and a “home-like setting.” The facility also employs specialized caretakers like rehabilitation nurses, occupational therapists and speech/language pathologists.
According to a 2023 survey of U.S. hospitals by the American Hospital Association, the share of hospitals providing skilled nursing care dropped from about 21% in 2016 to 17% in 2020.
Willa Prescott, vice president of communications for the Nebraska Hospital Association, told Nebraska Public Media News there is a greater trend of hospitals shifting away from traditional models of skilled nursing facilities.
“Skilled nursing has steadily moved out of hospital-based units and into freestanding facilities, home health and other community settings, driven by payment reforms, workforce pressures and patient preference for lower-intensity, lower-cost sites of care,” Prescott wrote in an email.
Largely due to Medicare policy changes, skilled nursing facilities have been harder to financially sustain since the 1990s. Many hospitals are creating networks and partnerships instead of directly running their own.
Skilled nursing facilities have faced many challenges since the COVID-19 pandemic began. According to a study published this month, there was a 5% decline in skilled nursing facility operating capacity from 2019 to 2024. The study notes that the decrease in the number of licensed beds – 2.5% over the same period – was not enough to account for the 5% decline. It cites staffing shortages as the most likely cause.
Prescott said 76% of hospitals in the state report persistent staffing shortages.
Additionally, the study showed a quarter of U.S. counties experienced capacity declines of 15% or more – mostly in rural areas or areas frequently reporting staff shortages. When a facility’s capacity declined, patients experienced longer stays at nearby hospitals while waiting for space and increased travel distance once they were admitted.
Medicare Advantage – a Medicare coverage option offered by private insurance companies – is also a potential contributor to this bottleneck. Medicare Advantage enrollment rose nearly 30% from 2011 to 2025, and over half of Medicare beneficiaries are on the plans. Lower reimbursement rates and prior authorization requirements discourage hospitals from running their own skilled nursing facilities. Patients and health care providers also report longer hospital stays as patients wait for skilled nursing coverage claims to be approved.
The general cost of providing health care has also gone up. In Nebraska, the NHA reports a nearly 33% increase in the cost to provide health care at a hospital in the state from 2020 to 2024.