CGR: ‘Generally Better To Sell’

“Times are bleak for county nursing homes.”

The sentence is the first under the conclusions and recommendations section of a Centers for Governmental Research study on The Future of County Nursing Homes in New York State.

The report goes on to say virtually all county homes in New York state are losing money, with county subsidies increasing as a result. Additionally, it acknowledges county nursing homes have provided valuable services to residents throughout the state for many years.

CGR also found that while several counties across New York state have recently decided to sell their county-owned nursing homes, are in the process of selling or are thinking about selling their homes, just over half of the 33 counties owning homes at the beginning of 2013 are not certain they will sell. Nearly a third of the counties seem to be content with the current realities of the homes and do not wish to sell.

“County homes have many significant strengths and attributes, and have provided needed long-term care services to many ‘hard-to-place’ county residents, regardless of their financial situations, many of whom in all likelihood would not have been served by other for-profit or nonprofit homes,” the CGR report states.

It also concludes that in recent sales of county nursing homes, evidence suggests that generally low-income and other ‘safety net’ individuals have not ‘fallen through the cracks’ or been forced to go outside the community for nursing home services.

However, the report also concludes reimbursement levels are far below the actual cost of services; few county homes can afford to continue to conduct business as they have in the past; much of the operating deficit is attributable to high costs of benefits; and the future of IGT payments is uncertain, among other points.

“To effectively address a number of the issues raised by this study, parallel and complementary actions will need to be taken at both state and county levels,” the CGR report states.

It goes on to give a number of findings and recommendations for each level. The report encourages each county to engage in a careful due diligence process of examining a range of options concerning the future of its home. Additionally, it finds that “it is generally better for a county to sell its nursing home then to either close it or continue to lose significant amounts of taxpayer money, as long as it is able to sell to a responsible buyer meeting various criteria and expectations important to the county.”

REACTIONS

Ron Johnson, Democratic candidate for county executive and a businessman who has a background in adult homes, expressed his frustration on the situation specifically regarding the Chautauqua County Home.

“From day one, I’ve said that I don’t believe the numbers; that the County Home can be financially sustainable, and that we need to make a business decision on that, not a political one, which we seem to be doing,” he said. “What’s frustrating is, because I’ve been in this business all my life, it would be like if we had a hot-button political issue having to due with fighter pilots, and I want (for example) a simple answer on why we don’t treat them better, or something. Vince would be frustrated, like I am (now), because he would know that there is no simple answer to that, that the answer is nuanced and it’s incredibly complex.

“To me, the County Home is a small part of the things that are going on in the county, and it’s a very small problem, because I think it’s a problem that can be fixed. By this becoming a problem, that frustrates me, because I think we’re taking the eye off the ball. It’s kind of like we took our eye off the ball when we were worrying whether there’s 25 legislators or 19, or whether they should pay me $85,000 or $109,000. Who cares? We’ve got some serious problems that we’ve got to address and fix. The County Home has been a political football, and they’ve got to stop doing it,” Johnson continued. “We’ve got to be more aware of the continuum of care, we’ve got to get a better process. The county has got to support assisted living in the community. We have to include our labor force in our decision-making processes. And, we have to continue to give the amazing care they give at the County Home, for those residents and their families.”

His opponent in the county executive race, Republican Vince Horrigan – who is also currently a county legislator – has voted in favor of selling the Chautauqua County Home several times.

“This report clearly validates that we are not unique here in Chautauqua County,” Horrigan said. “It is time to accept the fact that nursing homes should not be run by government. Eight counties are in the process of privatizing their government nursing homes and five more are actively considering privatization as the right way forward. The only sustainable business model for nursing homes without taxpayer subsidy is found in the private sector. When you sell your home you move out and never go back.

“The County Home ‘selling’ process is different,” he continued. “No one will be moving out unless they want to. Substantial private investment will create new jobs through the opportunity to create new assisted living options on the campus. Existing employees who pass a background check will be offered employment and will continue to take care of the same residents. The Chautauqua County Home will turn from a property tax consumer to a property tax supplier. Taxpayers will get property tax relief. The County Home will become sustainable through a proven business model which right now is successfully caring for over 800 Chautauqua County skilled nursing residents – over 70 percent on Medicaid. I understand why change creates uncertainty and fear. But we are at a critical time where we can seize the opportunity of private investment to create a sustainable nursing home with new modalities of care, job growth, and lower property taxes.”

Current County Executive Greg Edwards said he is very happy the CGR report was completed, published and reviewed across the state.

“Here are the professionals who studied the marketplace from end-to-end in New York state, looking at the 33 county homes, comparing them, and their analysis was consistent: County homes are unsustainable,” Edwards said. “I’m thrilled that we have such an excellent offer on the table for us to consider in Chautauqua County, where we can expand the service, keep the jobs, keep the people paid at similar rates, with the only modification being that they will not be a part of the New York state Defined Benefit Program. We find ourselves in an excellent spot in Chautauqua County, because as more and more county homes come up for and are sold, there will be less and less market for them. Clearly, now is the best time for us to have such a good company looking at our County Home, and helping the legislature do their due diligence that they do constantly to reach a sale on the County Home.”

CHAUTAUQUA COUNTY HOME

Over the last year, the Chautauqua County Legislature has heard from three parties interested in the Chautauqua County Home.

In October 2012, William (Avi) Rothner of Altitude Health Systems, presented his offer of $16.5 million to the Chautauqua County Legislature. In February of this year, the legislature voted against selling the home to Rothner, but expressed it would be interested in selling the home to a different buyer.

Edwards announced in August of this year that Richard Platschek of 10836 Temple Realty LLC and Chautauqua Restorative and Nursing Center LLC had offered $16.5 million cash with a $1.65 million good faith deposit to the county. Although the legislature was scheduled to meet with Platschek, the meeting was called off after the deposit was not made.

The latest group expressing interest in purchasing the Chautauqua County Home was introduced to the legislature during its regularly scheduled August meeting. Martin and Edward Farbenblum and Shannon Cayea of VestraCare made a presentation during the meeting, but were barred by Legislative Chairman Jay Gould, R-Ashville, from taking questions. The group expressed they would be interested in returning to answer questions from the legislature, but according to Gould, so far no such meeting has been scheduled.