County nursing homes in NJ disappearing

by | Jul 12, 2012

County-run nursing homes in New Jersey could be headed for extinction. Four have been sold to private operators in the last 18 months, including Buttonwood Hospital in Burlington County, and Camden County now is considering selling its facility. And some within the industry suspect that the remaining 16 aren’t far behind.

With local government budgets shrinking, county-run nursing homes — the government’s traditional means of caring for seniors who lack money for a private facility — are steadily being privatized. New Jersey is joining a national trend: Government nursing homes are mostly a bygone institution elsewhere and represent less then 6 percent of nursing homes in the country, said Don Redfoot, an analyst with AARP. Outside the Northeast and Midwest, county homes are virtually nonexistent. In Pennsylvania, five county homes have been sold since 2010, with 32 remaining.

“Gradually, the states and localities have been getting out of the business. It’s largely a budgetary issue, but there’s also a move away from institutionalization toward providing more community-based services, like in-home care or assisted-living homes,” Redfoot said. “Now, people have an alternative way.”

The main cause, industry experts say, is decreasing Medicaid subsidies, which besides providing health care for the poor also support long-term nursing care for seniors who have exhausted their financial resources.

Last year, Gov. Christie cut New Jersey’s Medicaid contribution for long-term care $75?million. And nursing homes in the state have seen their losses on Medicaid patients expand to an unsustainable level, said Paul Langevin, president of the Health Care Association of New Jersey, an industry group representing government and private nursing homes.

“It’s worse for county homes,” he said. “The vast majority of their patients are on Medicaid, and unlike the private operators, they don’t have the ability to target the cases that are better payers.”

Many seniors on Medicaid find beds at private facilities. But under state health-care laws, private homes that accept Medicaid only have to reserve 45 percent of their beds for those patients, leaving the overflow to look elsewhere or try to obtain a place at a county home.

Industry officials estimate that the difference between their cost of caring for a patient and what Medicaid pays works out to a more than $40 loss per patient per day. That’s a point of debate, but no one argues that they’re making money on the deal.

The Camden County Health Services Center in Gloucester Township, which also houses patients with mental-health conditions, maintains beds for 300 nursing patients, 80 percent of whom are on Medicaid.

“We’re a safety net,” said Gene Lynam, chief operating officer of the center. “The private homes have waiting lists. We take those who can’t get in there.”

Camden County officials are in talks with real estate brokers and, if they decide to go ahead, are looking at putting the facility up for sale by the fall, a county spokesman said. No specific asking price has been mentioned.

Not everyone thinks the privatization of county homes is a bad thing.

The New Jersey Department of Health declined to make an official available for an interview. But a spokeswoman wrote in an e-mail of Camden County’s potential sale: “Privatization is a reasonable option for the county to consider to best meet the needs of their community,” and said the state had recently committed an additional $47?million to increasing in-home and community-based care for seniors.

Short of the state and local governments’ budgetary situation improving radically, Langevin says, within the next five years, most of the 16 remaining county homes in New Jersey will likely be sold off.

In March, Burlington County sold its 200-bed Buttonwood facility for $15?million, after much controversy. A petition opposing the sale was signed by 5,000 residents. The decisive hearing drew hundreds of protesters, including workers and patients’ families, who turned up in red “Save Buttonwood” T-shirts.

The 100-year-old county institution is expected to be turned over by July to Ocean Healthcare, a Lakewood, N.J., nursing-home and rehabilitation chain.

Camden County officials are in talks with their nursing home’s management and union leadership to try to bring down the cost of operating the facility in the hope, they said, of avoiding a sale. Karl Walco, president of Council 10, which represents many of the workers at the home, said they were willing to make concessions “within reason.” The center’s annual budget is $75?million, of which the county is on the hook for $6.6?million — though, due to a budget gap, Lynam said, that could soon increase to $12?million.

So far, opposition has been limited to the unions, which represent the majority of the home’s 550 workers, who fear wages and benefits will fall if a private company takes over.

But as with Buttonwood, the prospect that the Camden County home will be sold has aroused anxiety among the families of many of the residents — though the freeholders have said they would make sure current patients would not lose their beds in a sale.

Arlene Lafferty of Bellmawr said she looked at eight or nine private homes before deciding last year to put her mother, 73, who suffers from Alzheimer’s and dementia, in the Gloucester Township facility. Ten months later, she said, the home was “wonderful,” a long way from what she had imagined.

“A lot of the places we looked at were horrible. They were old, understaffed, and they weren’t clean,” she said. “There are nice ones, but when you have a certain financial level, you just can’t afford that. Thankfully, we found this place.”


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