County nursing home financial picture remains bleakUnless the St. Croix County Health Center nursing home turns around financially, the taxpayer-subsidized facility could close.
By: Jeff Holmquist , River Falls Journal
Unless the St. Croix County Health Center nursing home turns around financially, the taxpayer-subsidized facility could close.
That was the clear message from some members of the St. Croix County Health and Human Services Board during its regular meeting Monday, July 9.
During a review of financial statements for the first five months of 2012, consultant Trent Fast from CliftonLarsonAllen indicated that the nursing home's deficit situation continues despite attempts to cut costs and enhance revenues.
According to current projections, the nursing home faces a $634,559 deficit for 2012. That deficit doesn’t take into consideration some $235,790 of county tax money that is already budgeted as a nursing home subsidy. It also doesn’t include about $228,000 in facility improvements that are required this year due to deficiencies identified in a previous federal inspection.
With those additions, the facility faces a $1.1 million deficit for 2012 that St. Croix County taxpayers will have to cover if it comes to reality, HHS board members explained.
The nursing home also receives a federal tax subsidy in the form of Intergovernmental Transfer funds, said HHS Board member Tim Hood, estimated to be about $489,659 this year.
Factored all together, Hood said tax subsidies account for too much of the revenue that keeps the publically-owned nursing home afloat.
“It seems we’ve built an unsustainable business model,” Hood said. “It’s built to fail. Where do we go from here? It can’t continue.”
Board Chairman Fred Horne reminded the group that St. Croix County voters had overwhelmingly approved an advisory referendum calling for a continuation of the New Richmond-based nursing home.
But Hood noted that the financial picture shared with voters was that tax support would amount to about $330,000 in 2012, not $1.1 million or $1.6 million.
He guessed that many voters would have voted against county support of the facility had true numbers been shared.
“I’m frankly appalled at how incorrect those numbers were,” he said.
HHS Board member Fred Yoerg added that the current projections are based on a best-case scenario. With new nursing homes being constructed, including the new Deerfield Gables in New Richmond, resident numbers could be down at the county nursing home making the financial picture even worse.
“I do feel we’re at a very critical juncture,” Yoerg said. “Something has to happen and it has to happen very quick.”
Horne suggested the county allow administrators to meet with the nursing home employee’s union to see if some agreement could be reached to make the operation more efficient.
In the financial analysis provided to HHS Board members, operational costs at the county-owned nursing home are much higher than the average governmentally-owned nursing home in the upper Midwest. Much of the higher-than-average costs are associated with wages and a benefits package that are much higher than similar facilities in nearby communities, Fast indicated.
“Our costs are 60 percent higher than the government homes in this geographic area,” said Tom Hawksford, HHS Board member.
Nursing home employees have already agreed to significant wage and benefit concessions, but much bigger cuts in pay and scheduled hours would be required to make the facility self-sustaining, Hood said.
Hawksford said he wasn’t optimistic that enough could be done to ultimately save the facility.
“We’ve gone years of ‘let’s try to do better.’ But our boat is still filling with water,” he said.
Hood said it may be time to close the county facility and let the private sector, which appears to operate more efficiently and at a profit, handle the nursing home business in the county.
Horne said he will meet with administrators and employee representatives and return with some possible “next steps” in dealing with the nursing home’s future.