Moreover, as a result of these losses, the projected operating margins for nonprofit nursing homes in 2009 is negative 16 percent and for-profit nursing homes have a projected operating margin of negative 8 percent.
Since 1990, 80 of the 719 nursing homes in New York State have been closed — that’s 11 percent — and there appears to be an accelerating trend toward the closure of voluntary and public facilities.
Now, the Department of Health has proposed a new nursing home payment system known as “regional pricing,” which the CCLC and others believe will make difficult times even worse by leading to payment reductions for these institutions and limiting access to quality healthcare.
The plan, which was approved as part of last year’s budget, divides the state into eight regions with the DOH creating an average for how much nonprofit nursing homes should be reimbursed by Medicaid. It will take effect on April 1, 2010.
But healthcare officials here believe the reimbursement methodology does not accurately cover costs and ignores legitimate cost differentials among facilities. Moreover, they say it encourages a “race to the bottom” by rewarding facilities that spend the least on care, and since nursing facilities spend about 80 percent of their operating budget on staff, there is a strong incentive to make reductions in that area.
“We are one of the few economic drivers out there right now — healthcare — that exists in New York State,” said Michael Rosenblut, president and CEO of the Parker Jewish Institute for Healthcare and Rehabilitation. “We’re keeping people working and taking care of our residents. What boggles me is that here we are looking to take more money out of the system, which this time would most likely cause staff cuts in our different organizations, so we’re going to move people to the unemployment line.”
CCLC believes the DOH is not ready to implement regional pricing and is asking public officials to reconsider it, stressing that doing so will not negatively impact the budget, because the plan is not aimed at saving money but rather to reform the system.
“I understand that the state is in a budget crisis, so is the country, so is the world,” said Florence Johnson, the lead organizer for the Southeast Queens Healthcare Education Project. “We’re all carrying the weight but let’s not disproportionately put it on folks who can’t bear to carry it.”
Isabel Kellerman, Margaret Tietz’s director of recreational therapy, worries that the regional pricing plan will lead to staff cuts, thereby reducing the activities the residents at the facility so greatly enjoy.
“Think about it — all the things that make your life exciting and fun and meaningful — that’s what recreation is, and I would have to cut some of that,” she said. “I’d try my best not to but that’s really and truly what would happen.”
Jane Nunziata, 82, who has been a resident at Margaret Tietz for the last year and a half, says she has greatly enjoyed her time at the facility especially since it has allowed her to participate in recreational activities like taking art classes, visiting the aquarium and even going to the beauty salon to get her hair done.
“I learned a lot and I saw a lot of things I would never see if I was home,” she said. “I may be old but I’m not dead.”
After attending the forum, Nunziata was disheartened by news of the cuts and hoped a resolution could be reached to stop them.
“Why pick on the nursing homes?” she asked. “Pick on somebody that has money, not us; we have no money. It’s terrible. It really is. Where would I be without this place? Where would I go? I wish we would hear better news.”
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