GRAND ISLAND, NE — CHI Health St. Francis permanently closed its skilled nursing facility on March 10, 2026, eliminating short-term nursing care and rehabilitation services for patients in central Nebraska. The closure of the 28-bed unit at 2116 W. Faidley Ave. came after the hospital lost its lease on the building when out-of-state investors demanded a steep rent increase, according to reporting by The Grand Island Independent.
What Led to the Closure
Steve Schieber, president of CHI Health St. Francis, described the shutdown as a reflection of "broader changes in how skilled nursing care is delivered and the increasing shift away from hospital-based skilled nursing services across the country," according to multiple Nebraska news outlets including Nebraska Public Media and KSNB Local4.
However, reporting by The Grand Island Independent revealed a more immediate trigger: venture capitalists based in New York acquired the building — formerly the old Lutheran hospital — and sought lease renewal at what Schieber called "an exorbitant rate." The approximately 80-year-old facility was deemed unsustainable at the new price, according to The Independent's reporting.
The skilled nursing unit had been operating with a census of roughly 14 to 15 patients across its 28 licensed beds, according to The Grand Island Independent. The facility provided round-the-clock nursing care, physical and occupational therapy, speech pathology services, physician oversight, and specialized rehabilitation programs for patients recovering from hospitalizations, as reported by Central Nebraska Today. The St. Francis Alcohol and Drug Treatment Center, housed in the same building, was also affected by the lease loss, according to The Independent.
CHI Health communications manager Anissa Paitz declined to specify how many employees lost their positions, according to Central Nebraska Today. Schieber noted that some staff members had worked at the unit for three decades, according to The Grand Island Independent. Case managers and discharge planners worked to connect patients with alternative post-acute care providers in the region, as reported by KSNB Local4.
Schieber stated the hospital's priority throughout the process was "supporting our patients, families and staff through a thoughtful and well-planned transition," according to NTV News.
A Nationwide Pattern
The Grand Island closure fits within a well-documented national trend. Hospital-based skilled nursing provision fell from 21% to 17% between 2016 and 2020, and overall skilled nursing facility operating capacity declined 5% nationwide from 2019 to 2024, according to Nebraska Public Media.
Several forces are driving the contraction, as reported by Nebraska Public Media. Medicare policy changes have shifted reimbursement structures. Staffing shortages remain persistent, with 76% of Nebraska hospitals reporting ongoing difficulty filling positions. Medicare Advantage enrollment has grown substantially, often steering patients toward home health services or other lower-cost settings. Meanwhile, hospital operating costs in Nebraska surged 33% between 2020 and 2024, squeezing margins on services like skilled nursing that already operate on thin reimbursement.
Federal data shows that hospital-based skilled nursing units have been closing across the country for years as health systems increasingly view them as financially unsustainable. The shift has accelerated since the COVID-19 pandemic, which exposed staffing vulnerabilities and drove costs higher across the long-term care sector.
CMS Inspection History
According to Medicare's Care Compare database, CHI Health St. Francis has maintained its status as a general acute care hospital serving the Grand Island area. The skilled nursing unit operated as an offsite extension of the hospital's post-acute care services rather than as a standalone certified nursing facility.
Hospital-based skilled nursing units like the one at St. Francis are subject to both hospital conditions of participation and skilled nursing facility federal requirements. These dual regulatory obligations can increase operational complexity and compliance costs, which industry analysts have cited as another factor driving hospital systems to exit the skilled nursing business.
The broader CHI Health system, part of CommonSpirit Health — one of the largest nonprofit health systems in the United States — has faced the same financial pressures affecting hospital operators nationwide. CommonSpirit was formed through the 2019 merger of Catholic Health Initiatives and Dignity Health, creating a system spanning 21 states.
Ownership & Operations
CHI Health St. Francis operates under the CommonSpirit Health umbrella, a nonprofit Catholic health system headquartered in Chicago. CommonSpirit ranks among the nation's largest health systems by number of facilities and reported revenues exceeding $34 billion in recent fiscal years.
The decision to close the Grand Island skilled nursing unit reflects a pattern seen across large health systems nationally, where organizations are narrowing their service lines to focus on higher-margin acute care, outpatient procedures, and specialty services. Skilled nursing and long-term care operations, with their reliance on Medicare and Medicaid reimbursement, have increasingly been shed by hospital systems in favor of standalone nursing home operators or home health agencies.
For Grand Island — a city of roughly 53,000 residents serving as a regional hub for central Nebraska — the closure reduces available post-acute care capacity at a time when the population continues to age. Families seeking skilled nursing placement after hospitalization now face a narrower set of options in the area.
Resources for Families
Families affected by this closure or concerned about skilled nursing care options in Nebraska can access the following resources:
Nebraska Long-Term Care Ombudsman Program — The ombudsman advocates for residents of nursing homes and assisted living facilities, investigates complaints, and helps families navigate care transitions. Families can reach the program through the national hotline at 1-800-677-1116.
Finding Alternative Care — Patients displaced by facility closures should work with hospital discharge planners to identify available skilled nursing beds in the region. Medicare's Care Compare tool at medicare.gov allows families to compare nearby nursing facilities by quality ratings, staffing levels, and inspection history.
Filing Complaints — Concerns about care quality or the transition process can be directed to the Nebraska Department of Health and Human Services, which oversees nursing facility licensing and complaint investigations in the state.
The National Long-Term Care Ombudsman Resource Center at [ltcombudsman.org](https://ltcombudsman.org) provides additional guidance on resident rights and family advocacy during facility closures and care transitions.