St. Croix County Health Center nursing home's future remains cloudy
The future of the St. Croix County Health Center nursing home in New Richmond is anything but secure.
Voters who overwhelmingly approved a recent referendum indicating their support for use of taxpayer money to subsidize the St. Croix County Health Center nursing home may have thought the issue had been laid to rest.
Monday's meeting of the newly reconstituted Health and Human Services Board did little to quell the persistent controversy over whether the county should remain in the nursing home business.
Newly appointed members of the HHS Board raised numerous questions about the financial viability of the nursing home during the meeting.
Health and Human Services Director Fred Johnson reported that the facility's books are being closed on 2011 and he estimates that the nursing home ran a deficit of about $430,000. That figure is over and above a levy subsidy that was originally budgeted for.
Over the first three months of 2012, the nursing home is about $80,000 over budget, Johnson told the HHS Board.
To try and minimize the nursing home's drain on the county levy, Johnson said the facility's managers and the HHS Board have been moving toward a plan to cut licensed beds from 72 down to 50.
With the smaller facility, Johnson noted, the nursing home would be allowed to hire a half-time administrator and reduce the hours of its director of nursing, saving several thousand dollars.
Nursing homes of 50 beds or less can also take advantage of higher reimbursement rates, which could help the bottom line, he said. Operating the nursing home closer to its bed capacity also is beneficial because the New Richmond facility currently pays a bed tax on empty beds.
To further strengthen the financial picture, Johnson said staffing hours are being reduced for all employees at the nursing home. In many cases, nursing positions are being scaled back to 90 percent.
Even with the efficiencies of a 50-bed operation and reduced hours, Johnson said managers expect the nursing home to require a county levy subsidy of about $298,000 this year. Projections for the future show a steady increase in the required subsidy each year, reaching an estimated $598,000 in 2015 and $738,000 in 2020.
And those figures are based on a best-case scenario, Johnson said. With a new nursing home facility set to open in New Richmond this summer, he said it's hard to say what impact it will have on client numbers at the county-owned home.
"I'm as confident as I can be that we will meet our census numbers," he said.
But HHS Board member Tom Hawksford said any census below the budgeted 49 residents would have an even greater negative impact on the county levy.
"If we can't keep it filled, we're going to continue in that downward trend," he said.
HHS Board member Fred Yoerg was a bit more blunt.
"If you lose occupancy, you're going down," he said. "You become insolvent."
Yoerg said it's the HHS Board's duty to taxpayers to make sure the nursing home operates efficiently and within its established budget. That's not happening now, he said.
"What reason is there to be efficient if you're getting a subsidy?" he asked. "The private sector would not allow it. You sink or swim."
HHS Board member Tim Hood asked why the county nursing home was so much more expensive to operate than similar privately owned facilities in the area.
Johnson said the county home is split into two floors, requiring more staffing on any given shift. He also noted that, overall, salaries and fringe benefits for the county employees are higher than employees at the privately owned homes.
HHS Board Chairman Fred Horne said that's why it's important for the county to continue working with the nursing home employees to find more cost savings if possible. He recommended that the facility offer a suggestion box for employees so that their input can be gathered on the topic of efficiencies.
"We want to work with staff," Horne said. "They have a vested interest in this."
HHS Board member Leon Berenschot said it's a shame if the nursing home's census numbers don't top out at 50 from now on. The facility's consistent five-star rating shows that residents receive the highest level of care when compared to other local nursing homes, he said.
HHS Board member Dr. Lisa Ramsay agreed, noting that the care provided in some nursing homes is "scary" even though it may be more efficiently delivered.
Yoerg recognized the high level of care, but said it can't be sustained.
"We all want Michelin tires, but not everybody can afford it," he said.
HHS Board member Roger Larson reminded the group that St. Croix County voters have recently approved a referendum stating that they supported the use of taxpayer money to subsidize the nursing home operation. A similar referendum was also approved in 2008.
"They said they want to subsidize the nursing home," he said. "This isn't the private sector. The voters voted twice on this."
Hood claimed many voters are unaware how much of a subsidy the nursing home requires each year. It's much more than the $330,000 budgeted levy amount that was indicated on the ballot, he noted.
"It's a bigger number than that," Hood said. "I think there was a lot of misinformation on that referendum question."
The HHS Board agreed to monitor the situation as the facility is reduced to 50 beds and competitors open up. Johnson said that by August the county nursing home should have a better idea where it stands financially.