John Manchin Sr. Health Care Center in Marion County.

Gov. Patrick Morrisey announced the sale Tuesday of four state-owned long-term care facilities to a private real estate development company with ownership in similar health care facilities.

CHARLESTON — West Virginia is set to sell four of its seven state-owned health care facilities to a New York-based development company that specializes in long-term care for seniors.

In a press conference at the State Capitol Building Tuesday afternoon, Gov. Patrick Morrisey announced that the Marx Development Group (MDG) will purchase Hopemont Hospital in Preston County, Jackie Withrow Hospital in Raleigh County, John Manchin Sr. Health Care Center in Marion County, and Lakin Hospital in Mason County for $60 million.

“After a long and careful process that’s been going on for a very, very long time, with a lot of internal and external vetting, I’m excited to announce that we have selected the Marx Development Group as the best candidate to purchase and invest in these facilities,” Morrisey said.

MDG is a real estate development company based in Fresh Meadows, N.Y. It has several long-term care companies under its umbrella, including Majestic Care, Boulevard Home Care Associates, and Boulevard ALP Assisted Living.

“MDG has proven to be highly effective,” Morrisey said. “They’re a patient-oriented owner, and they’re an operator of similar long-term care facilities in states around the region. They own and operate 55 properties, serving over 5,000 licensed beds. They operate right now in five states, in Indiana, Michigan, New York, Ohio, and Kentucky.”

Morrisey said MDG plans to invest in building between three and five new health care facilities in the state to replace the aging facilities at Hopemont, Jackie Withrow, John Manchin, and Lakin, potentially putting millions of dollars of investment in the state and creating additional jobs.

“This is terrific news,” Morrisey said. “Not only will this address some of the pressing maintenance concerns at these properties, but it’s going to provide a long list of modern, high tech, medical services to patients who are in need.”

House Bill 2006, passed in 2023, split the former Department of Health and Human Resources (DHHR) into three new departments: the Department of Health, the Department of Human Services, and the Department of Health Facilities.

As part of that bill, the secretary of the Department of Health Facilities (DHF) was empowered to sell the facilities under its supervision. DHF announced in July 2024 it had entered into a contract with Lument Securities LLC to develop a plan that included selling the four long-term care facilities to potential buyers while ensuring care for patients at these facilities remains uninterrupted.

Morrisey said the four long-term care facilities — which have 511 licensed beds — operate at a combined $6 million annual loss, with long-term projected costs expected to rise to nearly $40 million per year. Morrisey said the four facilities are also in need of significant capital investments to update and renovate the facilities at an estimated cost of $100 million.

According to a report released last November by the West Virginia Legislature’s Post Audit Division, the state has paid approximately $284.2 million for contract nursing at all seven state-owned hospitals and health care facilities between fiscal years 2015 and 2023. In fiscal year 2023 alone, more than $11 million was spent on contract nursing at the four long-term-care hospitals.

Nursing shortages have also limited the number of beds at these facilities. Looking at August 2023 numbers, legislative auditors found out of the 452 licensed beds at the four long-term care facilities at that time, that actual set capacity of beds was 202 due to being understaffed.

“…The greatest discrepancy between licensed capacity and the set bed capacity occurring at Jackie Withrow, which has a set bed capacity 145 less than the licensed capacity,” the auditors wrote. “A facility operating at a set bed capacity that is lower than the licensed bed capacity reduces the number of individuals that can be served at any one time at a given facility.”

While some lawmakers have made attempts in the past to spin off one or more of the state-owned facilities into private hands, the move has not always had full support. A bill to sell off John Manchin failed in 2021. And members of the Marion County legislative delegation have objected to the sale of John Manchin in the past. State Sen. Mike Oliverio, R-Monongalia, said he was still reviewing information about the proposed sale.

“I just learned about this today,” Oliverio said Tuesday afternoon. “My concern has always been for the care of the residents at these facilities. In addition, retaining and properly compensating the wonderful staff that has kept these facilities going so long. I will learn more about this in the coming days to ensure that the residents and their families will be properly served, and our public employees will be treated fairly, as well.

Morrisey said selling off the four long-term care facilities was a key part of his larger goal of trying to repurpose state government and eliminate inefficiencies.

“Even if the state invested this money, the long-term operating costs (are) only going to continue to rise, but they’d rise without substantially improving the level of care that’s provided to the patients,” Morrisey said. “If we sell these facilities, we would allow the state to avoid a lot of these long-term costs, and I think we can work to lift quality up.

“There’s certain roles that we have for state government and things that the government uniquely needs to do,” Morrisey continued. “But there are a lot of functions that quite frankly are not performed efficiently by the government, nor should they be. We identified this as one of them, and then we went through, we built on the work that was done in the past, and we brought this to closure.”

The closing for the sale of the facilities is set for Tuesday, Sept. 30, with a possible 30-day extension.