New York isn’t alone in struggling with the financial viability of its public nursing homes. Across the country, public nursing home operators are weighing their options in an era of diminishing state and federal reimbursement. Many counties, especially those in the Northeast, are choosing to sell, or contract out management of the homes, in order to stem financial losses.
In New York, 92% of homes had operating deficits in 2010, as CGR detailed in our in-depth report, The Future of County Nursing Homes in New York State. Financial pressures have led 8 of the 33 remaining counties with homes to decide to sell them, and another 5 to actively consider it. If all those potential sales actually occurred, New York would be left with 20 counties with nursing homes, down from 40 just 15 years ago.
From 2005 to 2009, half of states had declines in the number of public nursing homes, compared to 28% that had increases (more recent data aren’t yet available).
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Public Union Impact: Past and Future
Recent and ongoing work by CGR in several counties throughout New York has placed a spotlight on public employee unions and their impact on the cost of governmental services. In particular, the future status of county-owned nursing homes is directly affected by high labor costs and especially high benefit levels that have historically been negotiated with public unions, to the benefit of public employees and at the expense of taxpayers. County nursing home benefit levels, including retirement pensions and health insurance costs, are typically at least double the corresponding level in non-public facilities.
In decades past, county nursing homes were providers of last resort for the poor. While county homes continue to accept some residents that other facilities are reluctant to admit, as Medicaid has become a source of support for the long-term-care needs of both the poor and the middle class, nearly all nursing homes, both private and public, depend on Medicaid funding for a substantial share of revenue. Where county-owned homes are no longer the only facilities caring for the poor, they compete more directly with privately-owned homes. In this more competitive context, counties are questioning how much longer they can ask their taxpayers to cover the employee cost differential created by collective bargaining agreements—especially as counties face increasing fiscal stress, and as nursing homes face the prospects of probable declines in reimbursements looming in the near future. Read more »
How’d you like to be a county executive, legislator or member of a board of supervisors and have to decide the future of a financially-troubled county-owned nursing home? Often one of the area’s major institutions and employers, it provides an important community service, even though typically costing the county taxpayers significant amounts of money. No matter what you decide, you’re likely to be criticized from one or more directions. That is the unpleasant reality currently being faced by public officials in counties throughout all regions of New York State.
As recently as 2005, more than 40 counties outside New York City owned and operated public nursing homes containing some 9,900 beds. Now those numbers are closer to 35 counties and 8,100 beds, and those totals are likely to dwindle further over the next few years. Why the sharp declines in such a short period of time? Rising costs and declining revenues combine to force county taxpayers to plug steadily-rising deficits. Read more »