Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, May 9, 1995                   TAG: 9505090131
SECTION: VIRGINIA                    PAGE: C-4   EDITION: NEW RIVER VALLEY 
SOURCE: RICHARD FOSTER STAFF WRITER
DATELINE:                                 LENGTH: Medium

HEALTH CARE FIRM LOOKS TO EXPAND

Smith/Packett Med-Com Inc. owns and operates 27 nursing homes in Virginia, North Carolina, Florida and Arkansas. Now it's looking to operate closer to home.

Monday night at a meeting of the Bedford County Board of Supervisors, Smith/Packett pitched itself as a financially responsible alternative to health care provided by local governments. It bought Lynchburg's nursing home two years ago and built a new $3.7 million facility there.

The company also submitted bids recently to purchase Roanoke's nursing home, which is on city-owned property in Botetourt County. City officials are looking for a way to divest the city of the home, which needs major renovations and has been running a $440,000 deficit each year because of decreases in state Medicaid funding.

Like Roanoke, Bedford County's nursing home is housed in an old facility and has operated with a deficit that totaled more than $250,000 over the past four years. Unlike Roanoke, Bedford County isn't that willing to let go.

"Personally, this board didn't go out and solicit [Smith/Packett] to come here" and offer to buy the nursing home, said Supervisor Tony Ware. "I really don't think there's a reason to do away with it. We've got relatives in the home, and we're proud of it."

The rest of the board seemed equally skeptical of the idea, though some said they were willing to consider Smith/Packett's proposal.

Jim Smith, owner and president of Smith/Packett, told the board that his company can offer better quality care to county residents at lower cost because it operates many nursing homes and it can achieve economies of scale by purchasing medical supplies and essentials in bulk. His staff also can provide specialized care for specific illnesses and diseases such as Alzheimer's.

Furthermore, his company can afford to upgrade the nursing home immediately, Smith said. As government cutbacks increase, it just won't be financially viable for localities to operate health care facilities, he said.

"If there's any good news, it's that you're not in as bad debt as Roanoke's nursing home," Smith said. "But you're losing money each year, and we expect that trend to accelerate ... and I think you'll be very rapidly approached with the necessity to replace the [nursing home] building."