The Old County Courthouse in Elizabethtown was filled with residents of the Horace Nye Nursing home and many who were protesting the sale of the facility to Centers for Specialized Care during the June 5, 2012 Board of Supervisors meeting.
Essex County officials are hoping it will have cleared the final hurdle in the sale of the Horace Nye Nursing Home by the end of the week.
The handover for the county-run facility to the private organization Centers for Specialty Care (CSC) was delayed yet again several days before its scheduled handover on Friday, Jan. 31, this time because the parties wanted to “address a few loose ends,” relative to the septic system, said county attorney Daniel Manning.
Manning said the county expects the sale to become finalized in the first week of February, a statement echoed by CSC representatives.
Despite the years-long process that’s only now nearing its belabored conclusion, the particulars swirling around the decision to privatize the 182-year-old facility and the issues that have arisen as a result, including the responsibilities of the state in elder care, the fates of the home’s 133 staffers, which and any services will be trimmed, and if the newly minted “Essex Home for Rehabilitation and Healthcare” will cast away Medicaid recipients in favor of more lucrative revenue streams, seem no closer to being resolved — at least not publicly.
Behind the scenes, however, county officials were nailing down some of the thornier particulars that have flummoxed both the public and the county Board of Supervisors since the discussion to sell was first floated almost four years ago.
While Manning couldn’t give the Valley News a copy of the contract for confidentiality reasons, he did discuss clauses addressing the concerns that inquiring parties continue to bring up in both public and private forums, including at last month’s spate of weekly committee meetings.
“All current residents will be retained and will not be transferred to other facilities,” he read. “Essex County residents will be given preference for treatment and all union employees are guaranteed positions with the new owners.”
While it’s easy to buy into the rhetoric fanned by outspoken politicians that are given credence by tight-lipped officials, this saga encapsulates what happens when governments enter the previously unexplored waters of privatizing what were once sacrosanct public services.
“Nothing will change,” said Horace Nye administrator Deborah Gifford on facility operations when the sale becomes official in the first week of February.
Shimmy Idels, CSC’s regional administrator, told the Valley News that 99 percent of staffers have been offered positions with the new owners — including Gifford, who will stay on as administrator — and all but two have accepted.
Two of the four positions that have been eliminated are those that overlap with the tasks handled by the corporate office in the Bronx, he said, and the two others have been eliminated altogether.
“No one’s pay rate is moving down,” said Idels. “All employees have all been offered benefit packages comparable to what they were offered before.”
Medicaid patients won’t be discharged and will continue to be accepted, he said. “They make up an average of 80 percent of occupants across our homes — they’re the meat and potatoes of what we do — and I don’t see that changing.”
Idels, who appeared to surprised at the level of controversy generated within the community by the sale, said that CSC has no intention of disrupting anything and only hopes to improve the facility and be an asset to the community.
Plans are underway to renovate the building, he said. The project could take 18 months from start to finish. Other planned improvements include electronic medical records, equipping staff with touchscreen tablets and outfitting existing equipment with new software.
The phone number to a hotline will be posted around the facility, he said, and all are welcome to chime in with their thoughts.
Idels said that he will be a regular fixture at the facility during the transition process and encourages the public to contact him at firstname.lastname@example.org with their outstanding questions.
“We want to become part of the community and become one with it,” he said.
To get the community involved, Idels envisions a series of public events, including open houses and carnivals. This engagement reinforces the renaming of the facility to the Essex Center for Rehab and Healthcare, he said, a naming convention that reflects 95 percent of the company’s 20 skilled nursing facilities dotted throughout the state and the three in New Jersey.
Since Essex County’s Medicaid costs are capped off by the state at $7 million per year, the handover won’t negatively affect reimbursement rates, said county manager Daniel Palmer.
“It makes little difference if the home is public or private in terms of the rules associated with Medicaid, Medicare or private pay and the requirements for standards of care.”
Records show there were 634 certified nursing facilities in New York State as of 2010. Fifty-two percent of those are for-profit, 40 percent are non-profit and seven percent are government-owned.
Eighty-three percent of the beds within these facilities are either Medicaid and Medicare with only 17 percent as private pay, he said, noting that private companies tend to be more effective than government authorities in going after reimbursements and recouping those funds.
Private-pay is the ultimate form of revenue that cannot be recovered by Medicaid. For Essex County in 2010, Medicaid saw a reimbursement rate of $148 against $257.50 for private pay patients. As such, it cost the county $285 per day to care for each patient.
And this really is the meat of the issue: Short term residents provide homes with the ability to replace them more often with revenue producing private pays or Medicare eligible residents.
Caring for long-term Medicaid patients is simply an open-ended expense that drains fiscal resources and to remain solvent, facilities need to diversify their bed mix or get creative with their services.
Palmer dispelled the myth that Medicaid patients would languish in local hospitals in the event of privatization, noting state regulations mandate hospitalized Medicaid patients who no longer need inpatient treatment be placed within the first available bed within 50 miles of the patient’s home.
“When your team is losing, you change the manager — you don’t sell the team,” said Thomas Scozzafava, the Moriah supervisor who has been against the sale since the beginning and outspoken in support of Horace Nye staffers, about half of which he estimates live in his community.
Scozzafava said measures could have been taken to make the facility financially sustainable. A unit for rehab would have produced more revenue, he said, and several other board recommendations were never followed up on.
The lawmaker said while board members were aware of some problems within the system — namely when it came to benefit abuse by the staff — communication between the board, county offices and Horace Nye was strained and prohibited supervisors from taking a more hands-on approach.
“We seldom received comments from Horace Nye at our health and human services committee meetings,” he said, explaining that Gifford would rarely elaborate when giving her monthly reports.
“We knew there were problems and she should have been dealing them and didn’t.”
Scozzafava, echoing public concerns that private owners would abandon the facility’s safety net approach in favor of more lucrative revenue streams and lay off employees en masse, said that the county has a moral obligation to provide for its elderly and low-income population regardless of the cost.
“I’m hoping none of these scenarios will take place,” he said.
Former Essex town supervisor Sharon Boisen saw the sale as result of poor and biased decision making, namely when it came to what she perceived as the county’s unwillingness to sell several properties that were turned over to them in exchange for resident stays at Horace Nye.
“There is one lakefront property in Essex and possibly more than 10 properties throughout the county,” she said. “They should have explored options to selling these properties to generate revenue. Instead, descendants live in them without the usual cost of home ownership after the taxpayers cared for their loved ones.”
Additional items factored into Boisen’s vote against the sale. Cost savings didn’t add up, she said, and the need to put public health and safety first and foremost when making decisions was paramount.
“Legacy costs are a huge and ongoing expense to the county long after the sale,” she said. “Senior residents of Essex County lacking the means to move to a private home may suffer the consequences of insufficient health care, inadequate nutrition and lack of socialization — all of which is too high a cost to the citizens of Essex County.”
Supervisor Roby Politi, chair of the board’s Horace Nye Committee, voted for the sale on the grounds that private sector can run the home more efficiently than government.
“I never felt the county should be in the nursing home business,” he said. “We clearly don’t know an awful lot because we’ve lost a lot of money. There’s people who can do a better job than us, people who are in the business every day.”
Politi said that the county dug a financial hole that was very difficult to get out of.
“It’s been overwhelmingly clear that we’ve made the right decision.”
The North Elba lawmaker said that the county is fulfilling their moral obligation to county residents by ensuring the facility remains open to offer health care for those in need, a sentiment echoed by former Elizabethtown supervisor Margaret Bartley, who also voted to sell the facility.
Bartley said her greatest fear was if the county did not find the right buyer, Horace Nye would be closed, the employees laid off and the real estate sold or converted into office space.
“None of these alternatives would have been good for Elizabethtown,” she said. “With an aging population, myself included, we rely on having a place here that will care for our loved ones.”
After visiting nine of the homes run by CSC in May 2012 — including facilities in Rome, Chittenango, Gloversville and the Bronx — for a fact-finding trip that would influence the board’s final decision, Bartley said she knew the new owners would be good neighbors as well as assets to the community looking out for the staffers who will join their ranks.
“I am glad that the excellent employees and volunteers who have worked at Horace Nye will become part of the team that keeps Horace Nye running for years to come.”
Despite the spate of public hearings, reports and flow of information through the press, Horace Nye staffers appeared to have been kept in the dark throughout the years-long process.
“People were scared and they didn’t know what the new owners were going to do,” said a staffer associated with Horace Nye who spoke to the Valley News on condition of anonymity.
“It was all a hidden thing and employees didn’t know what was going to happen,” they said. “We never ever knew anything.”
The individual, who fears being blacklisted from future county positions, alleges that the administration never corralled the employees into meetings and kept them in the loop.
“The only information we had was from news that trickled back from county board meetings and the rumor mill,” they said.
The Civil Services Employees Association (CSEA), the union that represents Horace Nye staffers, appeared to agree.
“When I came in at the tail end of the of process in July 2013, the new union management had to go over and explain what was going on to the staff because everyone was in limbo,” said local chief Wendy Sayward. “We were, and still are, trying to get them as much information because it’s not fair — there hasn’t been any communication between management and the employees. The employees should be a part of that process. They don’t have know if they’ll have a job tomorrow.”
While the union was initially receptive to their concerns, said the source, senior brass balked at the staff’s offer to meet the county halfway when it came to slashing their benefits, reducing overtime and taking pay cuts because changes would have to be made across the board for all county employees, not just Horace Nye staffers.
“If they had taken the time to look at the problems, they would have been fixed,” said the source. “We tried to save money every day — the union just wasn’t there for us. We felt like a target, left out and a burden to the county. It was very demoralizing.”
Former union president Michael McGinn, the official who directly facilitated these discussions, was unavailable for comment by the time this story went to press.
Essex County personnel director Monica Feeley paid a visit to Horace Nye in Aug. 2012 to dispel rumors and address employee concerns.
“The employees weren’t sure on benefits and their retirement options and we explained the system to them,” she said. “People were coming to us with questions. Employees were using their benefits before they ran out. I didn’t want them jumping ship before exploring all of their options for moving forward.”
Barbara Paye is perhaps the most well-known opposition figure to the handover and became a familiar presence at protests and county meetings. The retired civil servant continues to voice her displeasure towards the sale by maintaining a Facebook page and writing letters to editorial boards.
Her late father, Harris Young, was a resident of Horace Nye for 12 years. Paye said that while she is admittedly speaking as someone with a strong emotional attachment to the facility, she fears that privatization would trim away the services and care that the county provided for her father, a WWII vet and well-respected community fixture
“The employees are dedicated and passionate and I believe that as benefit packages change, the work environment will change and people will get disgruntled and will affect the quality of care,” she said. “I’m afraid people will become a bottom line on a corporation.”
Paye also worries that CSC wouldn’t guarantee Essex County residents preference over outsiders. This is important, she said, because such a high percentage of Essex County residents are on Medicaid and require a safety net.
The Willsboro resident is also concerned about what will happen if the new owners decide to reduce the percentage of Medicaid recipients.
State law mandates that swing-bed patients — those who can’t be discharged back to their residences — have to be discharged to the nearest available bed within 50 miles. If those beds will no longer be available at Horace Nye, she said, then it’ll be a burden on families and won’t be cost-effective.
“They want to save money up front, but we don’t know what will happen down the road,” she said, citing additional concerns about possible staff reductions, meal quality and the overall quality of resident care
“When Horace Nye opened, it was for the people — it’s not anymore and I don’t feel as if county residents are going to be well-served.”
“This is not a situation in which you hope you’re right,” she added. “I pray that I’m wrong.”
Patty Bashaw, head of the county’s Office for the Aging, anticipates the new owners will increase their bed mix to account for a blend of rehab and private pay clients. Her office is preparing for the transition by beefing up their efforts to keep residents healthy so that they can ideally avoid long-term care altogether in the future.
“We’re going to continue to see an increase in utilization of our services, but it’s trending that way anyways due to the aging population,” said Bashaw.
The office’s services include home-delivered meals, lunchtime check-ins and ongoing work as advocates for keeping residents in the most appropriate settings.
Elizabethtown Community Hospital said they will no longer dispatch physical therapists to Horace Nye as a result of contract changes. It remains unclear as to how the phasing in of mixed beds at Horace Nye would affect their operations and policies.
According to CSC’s website, Horace Nye is currently seeking to hire two staffers to fill those roles in-house: an occupational therapy assistant and a physical therapy assistant.
The remaining question is how the staff, the largest number of people affected aside from the Horace Nye’s 100 residents, actually feel about this tectonic change to their lives and careers.
Staffers on-site told the Valley News on the condition of anonymity that they were uncertain of the future and that while they were vaguely aware of Idels’ presence at the facility, they haven’t been informed of the new policies by either the current administration or the new owners.
While many seemed friendly and eager to talk to the press, a sense of uneasiness was apparent in the facility as the clock ticked down to the handover.
This may have been a result of the gastrointestinal outbreak ravaging the facility on Friday, Jan. 31 — an occurrence that Gifford pointed out wasn’t uncommon for similar facilities — or the fact that staffers weren’t given an opportunity to speak freely to the press for fear of reprisals.
“It’s really tough because there aren’t many jobs in Essex County and most of us have grown very attached to the residents,” said one. “For many of us, this is all we have.”
No one expects county-run nursing homes to turn a profit. Ninety-two percent of all county-owned nursing homes operate in the red, said a 2013 Center for Governmental Research (CGR) study, and median losses per resident per day have doubled since 2006 and have quadrupled since 2001.
As financial stability of the homes has continued to be a burden on budgets, especially when state regulations hem in local autonomy, municipal governments are starting to bail out as they teeter on the border of insolvency, forcing them to either raise taxes, something that isn’t always possible with state mandates, or to consolidate and reduce services.
Of the 33 counties studied by CGR, eight are in the process of selling their nursing homes. Five indicate they are actively considering selling and the remainder plan to either continue or are discussing their options.
Five other counties sold their homes between 2005 and 2012: Oswego, Delaware, Montgomery and Fulton, and it appears likely that the state will soon exit the business entirely.
The trend toward privatization was given a push when the state legislature passed a new cap on local property taxes in 2011. This prohibited county officials from raising taxes above a 2 percent threshold without supermajority votes, an edict that essentially kneecaps cash-strapped local governments and forces them into a corner.
“It makes no difference to me if we choose to stay in the nursing home business or if we choose to go in another direction,” said county manager Daniel Palmer in a report to the county’s 18 town supervisors in June 2010. “The reality is the nursing home is not a mandated service and has costs that are increasing substantially each year. Ultimately if the decision is to remain in the nursing home business, then it will necessitate we cover the cost.”
Since Horace Nye was required to run as an enterprise fund — that is, when management is obligated to run the department like they would a private business, one with a self-supporting budget neutral operation — it failed on that account and budget shortfalls, namely legacy costs, would have to be absorbed by the county’s general fund.
That deficit was $3.3 million in 2012.
The tax cap is paired with a rapidly aging population that is expected to increasingly require specialized health care services. The region is expected to experience a 23 percent increase in people 65 and older between 2010 and 2020, a rate 15 percent greater than Upstate New York as a whole.
According to a 2009 regional assessment, if current population trends continue over the next 20 years, the Adirondacks will rival Florida’s west coast as having the oldest population in the United States.
Sixteen percent, or 6,233, of Essex County’s 38,961 residents are over the age of 65. With a median household income of $47,400, they’re not only grayer than the rest of the state, but poorer, too.
While it’s difficult to get a comprehensive picture of the state of nursing homes within New York, one metric that the state uses to rank facilities, the Complaint and Incident Summary Report, turns up a mixed verdict on CSC.
The 11 CSC-run facilities in the New York City-area clock in at below the state average of 33.7 complaints per thousand beds while the nine upstate facilities clock in well-above the average. Others, like the Duchess Center for Rehabilitation and Healthcare, report a complaint rate at three times the state average with another, the Waterfront Center, spiking at a cringe-inducing 128.7.
Horace Nye ranks at 49.8 for the report period from January 2010 to December 2013.
Idels attributes this to the fact that the upstate facilities are newer and it takes time for new policies to go into effect to bring them up to CSC standards.
“We’re going to bring the home into the future a bit,” he said. “Every nursing home has its own pulse. We don’t have a universal template and determine policies based on the needs of the residents and community.”
The state has to investigate any allegation that a nursing home has violated federal or state regulation or has provided inadequate care, said Gifford.
“A complaint may be made by either the resident or a third party and we are required by law to report any incident that results in resident harm, abuse, neglect or mistreatment.”
Not all of these complaints pan out to mistreatment, Idels said, noting that the regional office that handles upstate New York is particularly strict in determining anything that might be construed as a violation.
Other metrics, like standard health deficiencies during state inspections, reflected the upstate-downstate divide, with CSC facilities in the New York Metropolitan area clocking in at around and below the state average with Upstate facilities scoring higher.
It remains unknown when these lower-scoring facilities entered the CSC network and if the reports and records were accrued before or after they left government-run hands and entered into private management.
CSC is also taking ownership of Pleasant Valley Nursing Home in neighboring Washington County. Calls to local officials and nursing home administration were not returned.
A report given to the board of supervisors in April 2012 laid out the county’s options in a straightforward manner replete with recommendations from outside consulting firms, Medicaid payment breakdowns and some of the state mandates that put the county in a perilous position when it came to retaining the home, like the delayed IGT payments required to keep the county from dipping into the fund balance and the state’s reduction of funding designed to crank up home health care nursing services.
Some appeared to have not read nor shared it with their constituents because many continue to trumpet the myths and misconceptions both in committee meetings and to the public.
However, since it is against state law for the public to hold a referendum to decide on these issues, it was ultimately up to the 18 town supervisors to vote on Horace Nye’s future.
Six weeks later, after a long road that included a series of procedural votes, task force committees, visits to other government-run facilities and heated public protests, the Essex County Board of Supervisors voted by a two-thirds majority to sell the county-run nursing home to Centers for Specialized Care for $4,050,000 at its June 5 regular board meeting, a contentious session that was interrupted several times by members of the audience.
It was determined that $1.4 million would go towards legacy costs and the remainder would be put into the county’s fund balance. The facility, which was assessed at $5.3 million, would then be put onto the property rolls for 2014 and would potentially help out other large-scale county taxpayers by helping shift the burden. An increase in taxable value of that size may act reduce the tax rate and is not a wholly insignificant addition to the county’s $150,802,163 total taxable value.
Supervisors voting for the sale of the home included chairman Randy Douglas (Jay), Charles Harrington (Crown Point), Margaret Bartley (Elizabethtown), William Ferebee (Keene), David Blades (Lewis), Sue Montgomery Corey (Minerva), George Canon (Newcomb), Roby Politi (North Elba), Joyce Morency (St. Armand), Deb Malaney (Ticonderoga), Daniel Connell (Westport) and Randy Preston (Wilmington).
Tom Scozzafava (Moriah), Gerald Morrow (Chesterfield), Sharon Boisen (Essex), Ronald Moore (North Hudson), Michael Marnell (Schroon) and Ed Hatch (Willsboro) voted against.