Public
nursing home budgets squeezed
by the costs
of care
By DAN BENSON
Milwaukee Journal-Sentinel, July 13, 2003
The
past few years have been tough for local government-run nursing homes.
But
things are about to get tougher, operators say, as state and federal
revenue streams reduce to a trickle, expenses continue to increase and
marketplace pressures pose challenges.
In
Ozaukee County, officials say that, next year, the 200-bed Lasata Care
Center in the Town of Cedarburg will seek help from county property-tax
payers for the first time. The funds would offset a projected $1.4 million
deficit. Ralph Luedtke, a Lasata Center administrator, said he would have
to look at cutting services and staff, as well.
"It's
a labor-intensive business," Luedtke said last week, while looking
over the lunchtime crowd in the center's Alzheimer's disease ward, as a
platoon of certified nursing assistants was hand-feeding patients.
"If
you have to cut staff, you can't do it here," Luedtke said, gesturing
toward the group.
Washington
County's Samaritan Health Center in West Bend is also facing budget
constraints. "If you have to cut care," said Edward Somers, the
health center's administrator, "then you may as well not stay in
business."
It's
a dilemma faced by long-term care facilities everywhere, but acutely felt
by government-run homes. They are under a legal mandate to care for the
indigent, elderly and seriously ill, who often cannot afford care in
private facilities.
A
look at costs shows that everything is getting more expensive, especially
in areas of personnel. Governments are locked in by union contracts, which
increase wagesand pay health benefits that rise as much as 20% a year. At
the same time, the care facilities face reductions in revenue, a result of
cutbacks in the state-managed Intergovernmental Transfer program.
The
program was created to bridge the difference between the amount Medicaid
pays and the cost to care for Medicaid-eligible patients.
According
to the Madison-based Wisconsin Association of Homes and Services for the
Aging, a trade association for non-profit and government-operated
long-term care facilities, more than $77 million was distributed among the
state's 47 government-funded nursing homes through the program last year.
But that amount has been reduced by $40 million this fiscal year, which
began July 1.
In
Milwaukee County, where Medicaid payments ran $4.4 million short of
covering costs last year, county officials said they must find ways to
make cuts. The officials said services and staff time will have to be
reduced to cover a $500,000 decrease in the government program's funds, as
well as compensate for the increasing costs of personnel, insurance,
equipment and other items.
Since
a county property tax increase is not an option, James Hill, Milwaukee
County's interim administrator for the Behavioral Health Division, said
the funding will have to come out of the existing budget.
Time
to 'eat' financial losses
"Right
now, we are working on putting together a 2004 budget and, for lack of a
better term, we will just have to 'eat' those losses," Hill said.
His
division operates two long-term care facilities, for people suffering from
persistent mental health problems and for those with developmental
disabilities.
Hill
said he would not predict layoffs, "but with 70% of our costs tied up
in personnel, those can't be ignored."
In
addition, officials said, every Medicaid patient causes government
long-term care facilities to lose money.
In
Washington County, Somers said his facility loses nearly $50 every day for
every patient covered by Medicaid. In Ozaukee County, it's about $45,
Luedtke said.
Nearly
70% use Medicaid
Last
year, slightly more than 69% of Wisconsin's 37,506 nursing home residents
were Medicaid recipients, according to a report published in March by the
home services agency.
And
the number of Medicaid residents in government-operated facilities
continues to increase, as patients who are less ill and financially
better-off opt for assisted living facilities or in-home care programs.
For
instance, Luedtke said that about 72% of Lasata's residents are on
Medicaid, while 22% are private-pay.
"Six
years ago, we were 30% private and 62% to 65% Medicaid, and we were at
least breaking even," he said. "That is our mission, though, to
care for those who cannot pay their way."
The
typical private-pay resident spends $50 per day more than a Medicaid
resident for the same care, said John Sauer, executive director of the
Wisconsin Association of Homes and Services for the Aging.
Waukesha
County closed its Northview nursing home in 1986 in favor of subsidized
private facilities. The county feared that, otherwise, county property-tax
payers would have to pay too much toward the cost of care for indigent
elderly residents.
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