Who will care for Mom and Dad? Nursing homes in financial crisis
It is a painful number to read, especially if you are older than the age of 65 or in failing health.By: Wendy Wilson, Alexandria Echo Press
- Luella Beto
It is a painful number to read, especially if you are older than the age of 65 or in failing health.
More than one-quarter of nursing homes in west central Minnesota are in a state of financial crisis, according to a recent report.
The Long-Term Care Imperative, through Larson Allen LLP, surveyed 275 Minnesota care centers to determine their financial health and risk of closing.
The report found that about 10 nursing homes in west central Minnesota are in financial jeopardy and may face potential closure. Not only could this be a problem for housing and caring for those in need; it could mean a loss of more than 1,400 area jobs.
ONE RESIDENT’S STORY
Dressed in a bright blue sweater, Luella Beto, 80, wanted to talk. Beto lives at Knute Nelson’s care center in Alexandria. She suffers from scleroderma and Parkinson’s disease.
Beto spent much of her life working. After growing up in Villard, she was employed at two hospitals. At one, she was a nurse’s aide and with the other she worked in the pediatrics department.
She spent 27 additional years working at Sears and then took a job at the federal courthouse in Minneapolis where she stayed until she was 76 years old and symptoms from scleroderma forced her to retire.
Eventually, Beto’s deteriorating health caused her to move into the care center.
“It’s a good place to be if you can’t be in your own home,” she said.
Her eyes sparkled as she showed a reporter a small pot of flowers she made with students who came to visit the home. She spoke of the concerts and other activities that kept her busy.
What did Luella think of the financial crisis and potential governmental cuts to area care centers?
“Almost without question [the cuts] have a trickle down effect and would cause some changes,” she said. “There are places that [legislators] could cut that would not feel the impact nearly as much as these health programs.”
Beto praised the benefits Medicare has provided for her healthcare needs.
“A lot of people, due to their circumstances and their financial situation, didn’t have money to put aside,” she said.
CARE CENTERS’
PLEA TO THE
LEGISLATURE
“I think it’s important that funding is sufficient for care centers,” said Mark Anderson, CEO of Knute Nelson. “It is concerning that there are a number of care centers regionally and locally having financial difficulties.”
Knute Nelson experienced a 1.79 percent operating loss last fiscal year at its care center, according to Anderson.
“Medical assistance isn’t paying what the cost of care is,” Anderson said. “We owe it to our older adults to ensure that they get good quality care and that the reimbursement system for the state of Minnesota should have the obligation to at least pay the cost of care.
“We are committed to our non-profit mission of enriching the lives of every person we serve, regardless of their payment source,” Anderson added. “We believe older adults deserve dignity, respect and quality care.”
Katie Perry, vice president of communications at Knute Nelson spoke of the next step.
“We need to listen to them and advocate for them.”
The Imperative’s study did not include any potential cuts that could be made by the state Legislature and Governor Mark Dayton. The imposition of budget cuts to state nursing homes could make the situation especially dire.
“We are very concerned about the next legislative session,” Anderson said.
Budget cuts would affect wages and employees at Knute Nelson.
“It would have a direct impact on how we are able to provide services,” Anderson said. “It may impact our staffing ratios.
“We have had and continue to make operating adjustments based on legislative decisions,” he said.
Could Knute Nelson be the next care center in crisis?
“I would not foresee us closing,” Anderson said.
For purposes of the study, a nursing home with an operating margin of negative 5 percent or lower was considered in financial crisis and at risk of closing.
“Our staff has been working harder and harder the last two years without any pay increase,” Anderson said. “Jobs in health care, particularly those we care for, are very demanding due to the complexity of care we provide.
“Our staff deserves a decent wage, which is determined through reimbursement, which is set by the Legislature. The proposed legislative cuts to care centers undermine the value of older adult services and the essential care that is provided to them.”
Executive Director Carol Kvidt of Bethany Community in Alexandria agreed. She said their facility is able to remain financially “healthy” because a subacute unit financed primarily through Medicare helps meet the reimbursements’ shortfall.
The other programs, including medical assistance and Elderly Waiver, pay considerably below their costs, according to Kvidt.
“In the nursing home, we are paid approximately $25 a day per resident less than what our costs are,” Kvidt said.
Kvidt ran the numbers. A $25 shortfall per resident for 68 beds for 365 days came to a loss of $620,500 each year in costs not reimbursed for patients receiving medical assistance.
“The Elderly Waiver is the thing I’m most concerned about,” Kvidt said. “That supports people in their homes. So, if we cut that, people are going to end up in the nursing home likely earlier than they normally would need to be. It’s not the best way to save money, because in the long run it’s going to cost us more.”
Kvidt explained they had to reduce the size of the nursing home, so that it could survive on the funds available.
Kvidt said Bethany Community has not made cuts to staffing or patient care yet, but she remained concerned about the future: “I think their jobs would be in jeopardy if cuts are passed.”
According to Kvidt, also concerning is a proposal to cut the differential they receive for private rooms. Initially, they were given an incentive to increase the number of private rooms at their facility.
“We did that and have mostly private rooms here, but they’re proposing to cut that differential,” Kvidt said. “It’s an economic issue, but it’s also a dignity issue for two strangers to share a room with a curtain between them.”
CURRENTLY ON THE CHOPPING BLOCK
House Budget Committee Chairman Paul Ryan recently proposed massive changes to Medicaid and Medicare.
“The Ryan budget proposal takes us from neglecting the least among us to targeting them – threatening the lives, dignity, and future of poor, vulnerable seniors, children, and people with disabilities,” Howard Bedlin, vice president for public policy and advocacy from the National Council on Aging said in a statement. “But these Americans in greatest need are being targeted because they don’t have the voice or political power to fight back.”
A CLOUDY FUTURE
“Minnesota’s in a bad spot,” Kvidt said. “I think this baby boomer generation coming up is going to really shape things just in sheer numbers. I’ve heard it referred to as the ‘silver tsunami.’ ”
And the biggest question is, when that tsunami strikes, will everyone be prepared?
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