After years of public planning, discussion and meetings, the Fulton County Board of Supervisors just voted to sell the county home to a private provider. Fulton is but the most recent New York county to exit the nursing home business, with others certain to follow.
The reason is simple: Publicly supported nursing homes have been hemorrhaging red ink for years because of declining state reimbursement rates, increasing operational costs, and decreasing occupancy rates. As far back as 2002, counties were addressing the burden these money-losing homes placed on taxpayers.
In 2003. then-Schenectady County Manager Kevin DeFebbo identified Glendale as the greatest challenge facing the county, and the legislature’s answer was — we’ll build a new one. Only Legislator Robert Farley questioned the need for remaining in the nursing home business, when it was losing $5 million as year with no end in sight. Glendale struggled to find ways to increase revenue.
No end in sight
While counties around us saw the handwriting on the wall and began exploring all available options, Schenectady’s leadership stuck with its one and only plan, a new, state-of-the art Glendale. Over the years since the county manager’s 2003 observations, many ideas and plans have been put forth — at significant cost to taxpayers — as to how to bring this about. Eight years later, the only change is that the drain on county taxpayers has increased.
Glendale’s 2011 operating deficit is projected to be around $9 million, close to equaling the $9.5 million fund balance transfer required to balance the budget without a tax hike.
Last September, in the throes of one of the worst recessions in history, Legislator Karen Johnson stated the county did not consider privatization an option. During the March 9 meeting on Glendale, Johnson said, “We realize that the least expensive alternative to that [the existing facility] is to build a new nursing home,” a statement accurate only if the sole alternative is renovating the existing structure up to modern standards.
County nursing homes are rooted in the poorhouses and county farms of the past, which existed to provide minimal food and shelter to the destitute who would otherwise be out on the street. That was before Medicaid, a program initiated to provide for the poorest among us, but now widely accepted among the middle class, particularly when it comes to funding long term care needs, now the biggest slice of the Medicaid pie. Indeed, many consider artificial and deliberate self-impoverishment not only acceptable, but a mark of intelligent planning, when the goal is to get other taxpayers other than oneself to pay for one’s own nursing home care.
If Schenectady County had been open to all options, and been willing to accept privatization, the one solution that would actually provide relief to all county taxpayers, by now we’d be seeing light at the end of the tunnel: no more fund balance transfers to cover the home’s losses, maybe serious tax reduction to remove Schenectady from the list of highest-taxed counties, and perhaps funds to pay for projects that are actually mandated, which the nursing home project is not.
In February, County Attorney Chris Gardner announced that the county was abandoning plans to convert the former Trustco Headquarters into office space, part of a larger plan to improve public safety and the work environment for court personnel and visitors, stating, “Governor Cuomo and everyone are saying that we have to be more realistic about what we want versus what we need.”
If this is true for the court project, it is even more so for the Glendale project, which, if completed, will guarantee that Schenectady County taxpayers will be crushed indefinitely. The cost of improving the court facilities is small potatoes compared with replacing Glendale. If the court project is unaffordable, how can the Glendale project be justified?
Unlike the nursing home project, the court project is mandated, albeit without a deadline. The court system is a legitimate and necessary government function; there is no private property tax-paying entity to provide the same service, nor should there be.
Although Glendale has historically had a larger number of Medicaid residents than other facilities in the county, that is likely to change when Medicaid reimbursement rates change to statewide pricing for direct and indirect costs effective either Oct. 1 or at the new year. This will level the paying field for all facilities, thus making Medicaid patients more attractive to non-public facilities.
At the same time, Glendale is signaling that its mission is changing from being the county facility of last resort to one that will compete for a larger share of private-paying patients and rehabilitation candidates who are reimbursed at higher insurance rates.
Doing so will hardly stem the home’s losses, but will place Glendale, a taxpayer-subsidized operation able to sustain losses indefinitely, in direct competition with private-sector facilities. Wouldn’t it make more sense for the county to encourage the growth of private taxpaying property owners to help reduce the tax burden on individual homeowners?
Instead, taxpayers hear lectures: According to Legislator Brian Gordon, the county chooses to operate Glendale as a community service — “It is a financial burden, but we have a moral and ethical responsibility to take care of residents who can’t take care of themselves” — ignoring the fact that providing Medicaid coverage for such residents does just that. In essence, the cost of a new facility on top of the Medicaid cost for a long-term patient amounts to paying twice for the same patient!
The only obstacle to pulling the plug on the Glendale project is Schenectady County leadership. It is not too late to take it off life support, and it’s better late than never.
If the leadership is too fearful of political repercussions to make the right decision on its own, pass it off to county residents, and put it to permissive referendum. At the least, taxpayers should have the final say on a project of such magnitude, one that will affect them for years to come.
Carolina M. Lazzari lives in Rotterdam and is a former member of the Schenectady County Legislature. The Gazette encourages readers to submit material on local issues for the Sunday Opinion section.