Counties priced out of nursing home business
Saratoga latest to eye privatization
SARATOGA COUNTY Since George Washington was president, counties in New York state have been responsible for providing for the poor, elderly and infirm.
When Saratoga County was formed in 1791, one of the first things supervisors did was appropriate a few shillings each for care of “paupers.”
But the county’s founders wouldn’t recognize today’s system, in which the Maplewood Manor nursing home in Ballston Spa is just one of dozens of county-run nursing homes across the state.
Nor would they easily comprehend the costs of caring for the elderly and infirm.
What was a $3,650 county expense for the poor in 1816 has evolved into a modern nursing home with a $26 million annual budget for 2013, a facility that loses $8 million to $10 million a year — losses after federal aid, losses that must be covered by county taxpayers.
That kind of drain on local resources — replicated across the state — is prompting leaders in Saratoga and other counties to consider selling their nursing homes, or finding other ways to cut their losses.
It’s a move being made, almost always, over the bitter objections of public employees.
“What we see in other counties that have privatized is they dramatically reduced the workforce,” CSEA Regional President Kathy Garrison said at a recent rally.
Saratoga Springs Supervisor Joanne Yepsen said a new group, Citizens Advocate for a Sustainable Maplewood Manor, is being formed.
“It’s really important to keep a quality facility in our county,” the Democrat said.
In their 2013 budget, Saratoga County leaders propose creating a local development corporation that would take over management of the 277-bed facility, where roughly 315 county employees now work. The LDC would be able to manage Maplewood Manor’s sale over the next couple of years to a private owner, and also borrow against anticipated sale proceeds to cover the infirmary’s anticipated losses, county officials said.
Charlton Supervisor Alan R. Grattidge, a Republican who is expected to chair the Board of Supervisors in 2013, said he hopes a private, nonprofit health care company buys the facility.
“It’s a needed facility, and what we will do will be very important to its continued operation,” Grattidge said. “The current situation can’t go on because of the enormity of the deficit.”
The losses at Maplewood Manor have drained the county’s once-healthy surplus, Grattidge said, and without those losses the county likely would not have needed this year’s 3.5 percent property tax increase — or next year’s proposed 1.5 percent increase.
“The third option is to close it, and I don’t think that’s something anyone wants,” Grattidge said.
In making plans to sell its nursing home, Saratoga County is far from alone — about half of the state’s counties that own nursing homes are looking at that. Three homes have been sold this year, including Fulton County’s.
There are another 14 counties — including Saratoga and Albany — that are reviewing their options, according to the New York State Association of Counties. That’s out of 33 county-owned nursing facilities in 31 counties.
NYSAC officials said it’s a decision counties make reluctantly, only after years of significant losses.
“County administrators, county executives, county legislators don’t want to sell nursing homes. This is an exploration of last resort, but these are difficult times,” said Mark LaVigne, a spokesman for NYSAC.
cost of care
For years, he said, county taxpayers have subsidized nursing homes across the state that lost money because federal Medicaid reimbursements haven’t kept up with the cost of patient care.
In Saratoga County’s case, the reimbursement from Medicaid — the federal medical plan for the poor — is only $157 per patient per day, when county officials say the actual cost of care exceeds $300 per day. Some 83 percent of Maplewood Manor’s residents are on Medicaid.
Saratoga and other counties have also faced hits on county sales tax revenues since 2008, and then last year’s imposition by the state of a 2 percent tax cap on local governments changed what was already a difficult equation, making financing nursing home losses more difficult.
That’s before even considering the uncertainty for nursing home finances created by Medicare changes in the Affordable Care Act — commonly known as Obamacare — that will go into effect over the next few years; these will both cut Medicaid provider payments and force new efficiencies on health care providers.
“We have not come up with a model that lets counties stay in the nursing home business,” LaVigne said.
In the Capital Region, every county that has owned a nursing home has taken some form of action in recent years due to financial losses.
Fulton County sold its nursing home earlier this year for $3.5 million — one of three county-owned facilities that have sold statewide since Jan. 1.
Montgomery County sold its nursing home in Amsterdam for $645,000 in 2006, after a four-year process that started when county officials learned it would need millions of dollars in improvements.
buck the trend
Schenectady County, meanwhile, is spending an estimated $44 million to build a new 200-bed Glendale Home in Glenville — one that will be more energy-efficient and modern than the current, antiquated home.
The capital investment will lead to higher Medicaid reimbursement rates for patient care, and federal aid payments will allow the county to break even on construction, said county spokesman Joe McQueen. But the new facility will still lose money, even though two public employee unions have agreed to lower pay for new hires.
“The county Legislature believes it is an important investment,” McQueen said. “People say you’re losing all this money, but we don’t see it that way. We see it as an investment.”
People don’t criticize the library system for losing money, he noted.
“We want to be able to have our seniors stay in our community when they reach that time in their lives,” he said.
The new Glendale Home will be finished by late next year.
In Albany County, officials were well along with a $71 million plan to build a new, more-modern nursing home when the state Health Department in September rejected the plan, citing the costs and the impact on county finances of the 2 percent tax cap.
In the county’s proposed 2013 budget, County Executive Daniel P. McCoy has proposed transferring the existing nursing home to Upstate Services Group of Spring Valley, a private operator that already operates the Hudson Park nursing home in Albany and has made proposals to buy other publicly operated nursing homes. McCoy says the transfer would save the county $70 million over the next decade.
To the north, meanwhile, Warren and Washington counties are also exploring whether to sell their longtime infirmaries.
“This is a traditional function of counties in New York state,” LaVigne said. The decision to close or selling a nursing home, he said, “is not a decision they want to make.”
Historically, county infirmaries have been the nursing homes of “last resort” for the poor and infirm elderly who couldn’t be placed in private nursing homes or other facilities, either because of their physical conditions or financial situations.
Most counties, like Saratoga, have been providing care for the poor, elderly and infirm for 200 years, and sometimes longer.
A state law passed in 1824 declared that care for the poor and infirm would be a county responsibility, and counties should make plans to establish “poor houses.”
In Saratoga County’s case, it built its first poorhouse on what came to be called the “county farm” property in Milton in 1823.
The first poorhouse was a small, two-story house, supplemented in 1874 — after an investigation of noxious conditions at the old home — by the first hospital-style care facility.
There was a working farm for the able-bodied poor, where they grew crops from oats to rhubarb and sold milk, according to files in the county historian’s office.
But the people living there changed over time. A report from 1875 in the Saratogian newspaper noted that about two-thirds of the residents were “gray-haired inmates.”
In the 20th century, as government programs were developed to provide a safety net for the working poor and unemployed, those who needed county care were mostly the elderly who were infirm and had nobody else able or willing to care for them.
“There’s a distinction between providing a poorhouse and providing a nursing home,” Grattidge said.
In 1961, the county farm was closed, and its remaining residents moved to what had previously been a county-run tuberculosis sanitarium in Providence.
Its remote location was a disadvantage, and the current Maplewood Manor facility opened in 1972.
Because of the losses, county officials studied the situation in 2004, but declared it a needed service. Since then, however, the county has gone through what was then a $30 million surplus, and last year, county supervisors decided to study the issue again.
A pair of consultants, the Harris Beach law firm and the Arthur Webb Group, came up with the recommendation to sell the facility through a local development corporation. Ulster County, also advised by Harris Beach, is following a similar path with its nursing home.
In some form, Maplewood Manor “absolutely has a place in the overall picture of how the aging people is taken care of,” Grattidge said.