Questions about the future of the county-run nursing home continue, but a national shift to in-home care seems to be solving its problems.
A gathering of Marathon County’s executive committee met on a Saturday morning in the mostly empty courthouse in 2015. Officials with the county administration and the Sheriff’s Dept. had what they said were startling examples of inmates and other individuals with mental health problems not getting the help they were supposed to receive through North Central Health Care. Threats were made to “pull the plug” on the contract with NCHC and start a county human services department instead.
Cooler heads prevailed and NCHC and the county are operating on more or less the same page, with a new agreement about how the organization provides mental health, addiction and elderly services for Marathon, Lincoln and Langlade counties.
The Crisis Center at NCHC is under new leadership, a groundbreaking addiction treatment program is about to be expanded, and leaders are working to clarify performance metrics and expectations to make sure everyone is on the same page.
But dragged into the brouhaha, and still bruised from the fight, has been Mount View Care Center, the county’s nursing home located on NCHC’s campus in Wausau and part of the agency’s operation.
Plans for a roughly $13.5 million renovation of the facility were scrapped in 2015—county leaders didn’t know if NCHC would exist at all, let alone the nursing home it runs. Some board members questioned whether the county “should be in the nursing home business” at all.
Once widespread, county-run nursing homes have been dwindling in numbers across the U.S. for the past two decades.
It didn’t help matters that business wasn’t going well. The last time Mount View operated in the black was 2012. Since then the nursing home has experienced annual losses ranging from hundreds of thousands of dollars to more than a million.
Consultant Michael Peer of CliftonLarsonAllen speaks during with county officials to comb through the report detailing how Mount View Care Center, which has lost around $4 million over the past three years, can operate in the black.
County had to decide what exactly to do with the nursing home. It formed a committee and hired Minneapolis-headquartered consultant CliftonLarsonAllen (CLA) to study the issue. The first part of that report was released this month, detailing ways Mount View Care Center can help its bottom line by operating more efficiently and driving up revenues.
Out of that report came this: The consultants believe there’s potentially $4.7 million to be either saved or generated in revenue at Mount View Care Center, which has an annual budget of $25.5 million. And while that’s a pie-in-the-sky, optimistic number, even reaching half that amount would mean the difference from operating in the red or in the black.
Also helpful to Mount View’s future: Some of the suggestions are already in place, says Interim CEO Michael Loy. For the last few months, the nursing home has been operating in the black. Following more of the consultant’s recommendations should improve that progress, and perhaps even reduce the amount of county tax levy that supports it.
That’ll be an important selling point in what could be a tricky decision coming up.
For the nursing home to continue, it’ll need the $13.5 million renovation that was scrapped in 2015 (but likely will most more today). Feeling confident that Mount View can operate in the black is a key part of the decision.
The health care market
Tom and Margaret Jablonski look out a second-floor window of Mount View Care Center. Jablonski suffers from Parkinson’s Disease and needs the type care that only a nursing home can provide.
From his wheelchair, Tom Jablonski gazes out the window on the west side of Mount View Care Center. From the second floor of the building the 86-year-old can see the tall pine trees and the Wisconsin River. People generally don’t think of nursing homes as pleasant places, but Mount View can feel that way, thanks to its setting. Behind the building is a small condo for neighborhood cats that the residents seem to like. In the front, hidden from view unless you really start wandering, is a wooded courtyard with a bright blue fountain.
Jablonski suffers from Parkinson’s Disease, which locks up his body in frightening episodes. Mount View has been his home for about two years. Jablonski was a high school teacher at Wausau Newman before retiring in 2005.
His wife, Margaret Jablonski, says Mount View has been an oasis for them — there’s no way Margaret could care for Tom in their home on Wausau’s east side. Mount View is located about as close to home as she could hope for, which allows her to visit him daily. Margaret says she’ll live there too, one day, when the time is right. “It might not be the newest building in town, but the surroundings are beautiful,” Margaret says. “Can you imagine a more wonderful setting? It’s healing.”
The Jablonskis say they’re not sure what they would do if Mount View isn’t there for them in the
future. It would be tough to find a facility nearby that offers the level of care with Tom’s Medicaid insurance. They both have access to the warm water therapy pool at NCHC, which Tom has used in the past and which Margaret currently uses for its arthritis class.
People like Tom might have difficulty finding a place at another nursing home, especially in the future.
Peer told county officials that the number of nursing homes is expected to decrease in the next decades as insurers and government programs continuing emphasizing less-costly home care. And long-term patients, such as Tom, tend to cost more than Medicaid pays out.
The challenges of running a nursing home largely come down to the difference between Medicaid and Medicare. The federally-funded Medicare covers short-term nursing home stays due to illness or injury. In general, Medicaid covers long-term nursing home care, but only to income-eligible people and pays facilities at a much lower reimbursement rate. That’s partly because Medicaid is a joint state-federal program—and Wisconsin has one of, if not the lowest Medicaid reimbursement rates in the country.
A county-run nursing home could be considered advantageous to a community. It provides an option in a market where profit motive doesn’t give a private business incentive to treat Medicaid patients.
But even a county-supported facility can’t hemorrhage money for long.
It’s not surprising that several of the major recommendations of the study by CLA was to decrease the number of Medicaid patients at Mount View and increase and market to Medicare patients.
Mount View already has several services that cater to Medicare payers, including the specialized ventilation unit.
Finding the balance between Medicare and Medicaid patients will be the key balancing the books at NCHC — and those changes are already happening.
Virtually nothing in the report was a surprise to NCHC officials, Loy says. In fact, many of those changes are already under way or completed.
For example, NCHC this year drastically cut down the number of long-term care patients it serves, consolidating two units down to one. The number of beds in the nursing home’s nearly 100-year history has always fluctuated. It once served as many as 400 residents, and recently had been serving about 220. That number is down to about 180 now, which helps Mount View operate more efficiently, Loy says.
That’s important, because until the last few months, the numbers didn’t look good. In 2012, the last year the nursing home operated in the black, it made $568,000. In 2013, it broke even, and then the losses started:
• 2014: $1.8 million loss
• 2015: $500,000 loss
• 2016: $1.8 million loss
Trimming down on the number of long-term care patients, which cost roughly $60 per day due to the difference between Medicaid reimbursements and operation costs, has been key. It eliminated the need to staff two full units. And with a plethora of job openings in a field already notoriously difficult to find help, that meant NCHC didn’t have to fill open positions. (Mount View operational losses were covered by contingency funds from NCHC as a whole.)
The numbers have been looking better since the first of the year. In March, the organization stemmed the losses, just about breaking even. In April, it found itself $15,000 in the black.
It’s not that Mount View kicked out or refused patients. The demand for long-term facility care simply as been dropping because of a general shift to less-costly in-home care. In other words, Mount View is changing to better match the market of elderly and disabled care.
In the business ‘no matter what’
County Board Member Bill Miller sat mostly quiet through a presentation by CLA of its study. Miller was one of many voices saying that it might be time for the county to get out of the nursing home business, even though he listened with interest and appreciated the information.
Miller may now represent a minority on the county board. He’s not yet 100% convinced that the county running the nursing home is the best bet. “I don’t like the idea of the public sector competing with the private sector,” Miller said after the meeting. “I’m keeping an open mind.”
Could the private sector be part of the solution at Mount View? That’s a question board member Jack Hoogendyk says he plans to ask as the committee makes its recommendations to the full county board about the nursing home’s future. He points to the salary-benefit ratio, which is much higher at Mount View than other nursing homes around the area, according to the report. Privatization helped keep costs low within the state prison system when Hoogendyk was a state legislator in Michigan, he says. Maybe the same could be done at Mount View.
Hoogendyk says he’s impressed with the work CLA has done so far and the recommendations sound pretty solid. He also lauded the work Loy and Senior Nursing Home Operations Executive Kim Gochanour have done so far to curtail costs at Mount View.
Many of CLA’s recommendations suggested ways for Mount View to be more competitive, and the nursing home renovations are a big part of that. The average “plant” age, referring to the campus’ buildings and infrastructure, is roughly 27 years—more than double of what’s typically found in private nursing homes in the area. Updated facilities could help make it more attractive to private insurance and Medicare patients. In fact, many of the report’s recommendations hinge on those updates.
This fountain on the NCHC campus is one of the features Mount View residents cherish.
Meanwhile, uncertainty has put NCHC officials in a planning bind. Does it upgrade something that could be fixed in the renovations that might or might not happen? Do you invest in infrastructure if the county is going to “get out of the nursing home business?”
Gochanour points to Mount View’s antiquated call light system. New technology can make nurses more efficient, thus saving on labor costs, as pointed out in the report. But would it pay to replace a system that would need to ripped out in a renovation? The call lights are one of many examples of this, Gochanour says. And would it pay to make upgrades in any area if the county isn’t going to stay in the business in the first place?
That’s a question the county has to figure out soon, says John Robinson, county board member and chair of the Mount View Care Center Committee. Robinson wanted time for the committee to digest the consultant’s information but warned that the county needs to make some decisions quickly.
“We’re in the nursing home business no matter what,” Robinson says.
The county is obligated by state statutes to provide what are called “protective placements”—people who have “mental illness, degenerative brain disorders, developmental disabilities or other like incapacities.” Typically at Mount View that’s about 30-40 of its residents, Loy says. “We either run the home or contract for those services. We need to plan our next steps.”
Meanwhile, that $13.5 million renovation figure? That’s going up. The county already spent $650,000 on the initial designs that were scrapped in 2015. At a conservative 4% construction inflation rate, that price tag will likely be at least $15 million if bid out next year. Or it could be even higher. Contractor prices were low as the nation was still pulling itself out of a recession, says Marathon County Administrator Brad Karger.
That means it will be more expensive to give residents things like a shelter in the drop off area, or private bathrooms. Or softening up the institution feel of the place with décor more friendly than cinder block walls. That important, because attracting the higher-paying Medicare and private insurance patients will depend on it.
Peer predicts at least 25% of nursing homes in central Wisconsin will be gone in the near future, and thinks that number could be even as high as 50%. Profit margins are slim for even the most successful operations. Couple that with an increasing emphasis on home care, and it’s likely fewer private companies will be in the nursing home business at all.
As the county makes its decision, it’ll search for a tricky balance between maximizing profit to keep the nursing home operating smoothly, and making sure it still serves people who need it—many of whom aren’t attractive clients to private nursing homes.
That includes people like Tom Jablonski, who can’t imagine living anywhere else in the coming years. “This is home,” Jablonski says.