Amid Budget Squeeze, N.Y. Sells Nursing Homes

by | Aug 31, 2012

From: NPR

The national recession may be over, but local governments around the country are still hurting. Core services and programs are being scaled back, cut or privatized. In Upstate New York, county officials are scrambling to sell off nursing homes that have been taxpayer-funded for generations.

Horace Nye Nursing Home in Elizabethtown, N.Y., a modest brick building that sits a stone’s throw from the village square, has 100 beds, and that’s how many elderly people live here. There is always a waiting list.

The home was established by Essex County in 1832, when this village in the Adirondack Mountains was a frontier mining and logging town.

It was a place of last resort for people too old, too infirm and too poor to care for themselves.

But earlier this summer, county supervisors — including Sue Montgomery Corey — voted to sell the home to a private company based in the Bronx.

“I think we are really at a point, because of the financial condition of government in general, of really having to make some tough choices,” Montgomery Corey says.

Horace Nye loses a ton of money. State and federal agencies have refused to boost Medicaid payments for poor residents, which means Essex County taxpayers have been forced to chip in $2 million a year to keep the place running.

Montgomery Corey says a corporation can operate more efficiently and can pay for things that cash-strapped Essex County just can’t afford, like training for staff and new equipment. The company will also hire workers for significantly less than the county paid its employees. But some county leaders say the belt tightening has gone too far.

“There’s some services that government is morally obligated to provide,” says Tom Scozzafava, another member of the Essex County Board of Supervisors. Despite the flood of red ink, he voted against the sale. “I think services for our elderly population is critical, especially in a county as rural as Essex County.”

Local Squeeze

This kind of debate is happening all over the U.S.

It’s not always nursing homes. Nationwide, governments run only about 7 percent of senior homes, so in some places it’s cuts to police departments or nutrition programs or public transportation.

Local officials are asking big questions about what their core mission should be and how they should pay for it in the post-recession world.

Larry Eichel is a researcher with Pew’s American Cities Project, which released a study in June called The Local Squeeze.

“Revenues for local governments are going down. Demands for local services are going up. That’s the squeeze. The economy may be recovering, but a lot of local governments, the revenues aren’t recovering — or they’re recovering very slowly,” Eichel says.

In New York, that squeeze got worse last year when the state passed a new cap on local property taxes. Some local governments here are on the brink of insolvency. At least 10 county-run nursing homes have already been sold, and county officials say they expect another dozen to be privatized in New York in the next couple of years.

But critics say it’s unclear what will happen if some of these private companies go out of business, or stop taking residents who rely on Medicaid.

“Private picks and chooses who they keep and who they take,” says Shawna Barber, who has been a nurse and county employee at Horace Nye for 19 years. “And what about the rest of our county residents that’s going to need it someday? And what about our people who are here now that are on Medicaid?

“It’s scary,” she says. “I’m just afraid that if they get sick and have to go to a hospital, there won’t be a bed there to come back to.”

Especially in rural areas like Essex County, that would mean families would be forced to care for elderly loved ones at home, Barber says, or to drive long distances to find nursing home care in the nearest city.

Centers for Specialty Care, the company that agreed to pay $4 million for Horace Nye, has been buying up government-owned nursing homes across rural New York. It’s currently negotiating to buy another home in nearby Washington County. The company refused repeated requests from NPR for an interview.

But the day before Horace Nye was sold this summer, another private nursing home nearby announced that it will sharply cut the number of beds available to low-income seniors who rely on Medicaid.

Get in touch