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County nursing home's finances come into focus

As St. Croix County voters prepare to vote on a non-binding referendum question in April, the current financial health of the county-owned nursing home in New Richmond is becoming a bit more clear.

At last Wednesday's Health and Human Services Committee meeting, Department Director Fred Johnson reported that the 2011 books are nearly ready to be finished. County officials have until the end of March to complete the financial reports concerning last year.

As the numbers are finalized, Johnson told the committee that it appears the St. Croix County Health Center nursing home will be about $460,000 in the red for the year. The operational deficit ends up being covered by the county's general tax funds.

Nursing home officials had hoped to limit the facility's reliance on the county levy to about $330,000 this year, but fewer residents on average and reductions in reimbursement rates caused the deficit to climb slightly.

Despite the news, committee member Richard "Buzz" Marzolf said the financial picture isn't that gloomy. He noted that in 2008, when county voters overwhelmingly approved a referendum to continue support of the nursing home, the facility required about $660,000 in levy funds to stay afloat.

"So it's about half that now," Marzolf said. "We have reduced expenses over time."

The levy support issue has been a topic of heated debate among St. Croix County Board members for several years. Some elected officials want to close the county-owned nursing home and let private entities meet the demand for beds. Others support the continued operation of the facility, noting that employees there provide a high level of care to residents, and the publically supported nursing home ensures that care will be available to anyone who needs it.

On April 3, another referendum of county voters is planned. County board members hope to gain some clarity about what the public supports in terms of ongoing tax dollars for the facility.

Mixed in with the debate about the use of public funds for the operation is an ongoing discussion by the committee about how the nursing home should operate in the future.

The facility is currently licensed for 72 beds, but the typical census averages about 60 at any given time. The nursing home is paying $170 per month in bed tax for each bed, Johnson explained, so about 12 empty beds on average are a drain on the operational budget.

With so many empty beds, committee members asked why several potential residents had been turned away at the nursing home over the past several months.

Johnson said the applicants had required care levels beyond what the New Richmond facility could provide at this time.

Over the past few months, the committee has discussed the possibility of reducing its authorized beds to 57 or 50. A reduction to 50 beds would allow the nursing home to reduce expenses by cutting back to a half-time administrator and a half-time director of nursing. A reduction in staffing would also save money. A 50-bed facility also gains higher reimbursement rates (an extra $17 per day for Medicaid patients).

Johnson said such operational changes would help get the facility closer to break-even in terms of its budget.

"It's the most financially viable in terms of levy," Johnson said. "The best scenario is 50 beds."

But according to a preliminary estimate on the topic, even operating a 50-bed facility would require almost $300,000 a year of taxpayer subsidy for the nursing home to stay open.

Committee member Roger Larson said he had an issue with the idea of reducing the number of licensed beds at the nursing home. Once the beds are lost, the facility would have a tough time getting them back if needed, he said.

"To keep downsizing makes no sense to me," he said.

County employee Kim Dupre agreed, noting that the privately run nursing homes in the area aren't taking steps to downsize.

"If they're not doing that, why are we?" she asked.

County Administrator Pat Thompson said his job is to help county departments stay within their budgets and right now the nursing home is beyond its established budget. He suggested that needs to be addressed.

"I'm looking at the 2011 year end and that's a lot different from what was originally projected," he said.

Johnson said the entire issue boils down to what the county board will ultimately support in terms of levy backing.

Marzolf said he continues to be worried about the ongoing debate about the nursing home. He said the facility provides five-star-rated care, and people shouldn't be constantly on edge about the future of the nursing home.

Even though Johnson recommended that the committee seriously consider the 50-bed option, the members tabled any action on the matter until more definitive financial reports are completed and until the referendum vote occurs.

Jeff Holmquist
Jeff Holmquist has been managing editor of the New Richmond News since 2004. He holds a bachelor's degree in journalism and business administration from the University of Wisconsin-River Falls. He has previously worked as editor in Wadena, Minn.; Detroit Lakes, Minn.; Hutchinson, Minn.; and Bloomington, Minn. He also was previously owner of the Osceola Sun, Stillwater Courier and Scandia Messenger along with his wife. Together they previously founded and published The Old Times newspaper for antiques and collectibles collectors; and Up!, a Christian magazine of hope and encouragement.
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