Golden Hill Health Center has been a fixture in the Kingston community for 65 years. Seniors who find they can”™t take care of themselves, either short-term or long-term, prefer to go to this county-run nursing home.
In the past three years, the nursing home has run a deficit of approximately $5 million, up from $1.3 million in 2003. Ulster County has set aside $25.7 million for the facility in its projected 2008 budget and expects to get back $21.7 million in revenues, resulting in a shortfall of $4.4 million ”” a cost that will be borne by taxpayers.
“Each year the amount the county has to pay goes up,” said David Donaldson, chairman of the Ulster County Legislature. “The state has been trying to force counties out of the business of nursing homes. Private nursing homes get larger reimbursements for Medicare. It gets more difficult to maintain.” Donaldson, whose mother has been in and out of Golden Hill, said the financial burden is exacerbated by the fact that the 280-bed facility needs major infrastructure improvements. Deteriorating sewer pipes need to be repaired, which could cost as much as $22 million, he said.
Yet Donaldson said the public nursing home fulfills an important function. “We need to create more beds. There”™s been a shortage.” And while he said proposals to turn the facility over to a private company have been discussed, this is not a popular option, given that “many people are used to the county running it. It”™s the nursing home many people prefer.” Donaldson said many of the seniors at the facility are lower- and middle-income people who may not have other options.
As a county nursing home, Golden Hill is experiencing a dilemma laced with ironies. Though Golden Hill is a public facility, it is renowned for its high-quality service, which is tied to the fact that the staff belong to the Civil Service Employees Association, the state”™s largest employees”™ union. The staff is compensated well, including a generous health insurance and retirement package. Managers of private nursing homes have the advantage of being able to negotiate their employees”™ wages and benefits, reducing costs but possibly compromising service delivery.
The increase in county employees”™ benefits is a growing and significant cost burden for counties, however. According to a September 2007 report on county nursing facilities in New York state by the Center for Governmental Research (CGR), a nonprofit research group based in Rochester, the average benefits of county nursing home employees more than doubled between 1995 and 2005, amounting to 121 percent, compared to 62 percent for private and voluntary nursing homes. State-mandated pension and retirement costs for the county employees escalated to comprise 50 percent of the salary levels in 2005, the report showed.
Even though its costs are higher, as a county nursing home Golden Hill receives less in Medicaid and Medicare reimbursements from the government, said Sheree Cross, the facility”™s director. The reasons are complex and are common to all county nursing homes in the state.
First, county facilities attract fewer short-term residents who qualify for Medicare, which brings in higher reimbursements, compared to private nursing homes. According to the CGR report, “proprietary and volunteer facilities have cornered a disproportionate share of the market on relatively lucrative short-term sub-acute and rehabilitative residents.”
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More than 55 percent of all discharges at the private and voluntary homes have short-term stays of 30 days or less, compared to 43 percent of those from county facilities, according to the report. County nursing homes tend to operate as a safety net, serving patients who are difficult to place and have a limited ability to pay.
“We have some residents who are at the lower need, lower reimbursement level. Do they qualify for skilled nursing care? Yes. They need to be with us,” said Cross, who noted that a few residents, including a couple of centenarians, have been at the facility for more than 20 years.
Second, Medicaid reimbursements for county nursing homes haven”™t been adjusted for inflation and are still based on costs for 1983. The CGR report said this results in an average loss of $21.23 each resident day. At Golden Hill, Cross said the cost per person is at least $250 per day, and sometimes as much as $280, for 75 to 80 percent of residents. But the Medicaid reimbursement is only $170 to $180 per day, she said.
According to Cross, the state Legislature is working to increase the Medicaid rates to the 2002 level, which would be phased in over four years. However, the federal Centers for Medicaid and Medicare Services must first approve the change.
Third, Medicaid reimbursements to county nursing homes have been reduced drastically due to the imposition of an “upper payment limit” by the federal government in 2001. According to the report, the limit was implemented after the federal government discovered some states were inappropriately reallocating the federal subsidies designated for health care for other uses. At their peak in 2000, the intergovernmental transfers, as the funds are called, resulted in a median payment of $1.3 million to county nursing homes outside New York City. It was reduced to $374,529 in 2005, according to the report. The reduction contributed significantly to the median net operating loss of $2.6 million experienced by the state”™s county nursing homes in 2005.
The state Legislature recently passed a law providing $100 million over the next four years to county nursing homes, which should help provide some measure of financial stability.
But much more needs to be done, Cross said. She would like Golden Hill to be able to add some assisted living units, but the federal guidelines prohibit it. Since the Sept. 11, 2001 terrorist attacks, more people have moved into the county, creating a growing demand for beds. Many residents entering the facility tend to be older than in the past, and “they”™re coming in sicker,” increasing the need for care. People are also more demanding more services, a trend she expects to accelerate as the baby boomers age. While there is no easy answer, “two years from now I”™m hoping we”™ll be closer rather than further away in terms of our deficit.”
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