Polk County can send a message to Madison on November 4 that affordable health care for all must be a priority NOW! Cast your "Yes" Vote on the Health Care Referendum.
The Referendum does not specify exactly which health care plan should be adopted. The Referendum simply tells our legislature that health care must be their number 1 priority, and that they should get to work immediately to find a way to provide affordable health care for Wisconsin residents.
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Monday, October 20, 2008
Friday, October 10, 2008
Economic Impact of Golden Age Manor: the Rest of the Story, JoAnn Hallquist
The Ledger’s October 2nd edition reports Golden Age Manor losses at $8.1 million over the last 10 years. Sorry, but this isn’t the correct number to focus on. The losses over the last 10 years totaled $2.4 million. Why the difference?
The federal government pays the government-owned nursing homes, not just Golden Age Manor, to stay in business through a program known as the Intergovernmental Transfer Program (now called Supplemental Payments Program). Those federal funds enter Polk County to help pay our county nursing home, Golden Age Manor, for the extra costs associated with a high percentage of Medicaid residents – costs that are above and beyond the inadequate reimbursement under the Medicaid program. Those funds have totaled $5.5 million over the last 10 years.
Everything was fine as long as Golden Age Manor made a profit and contributed to the county coffers. The problem of the last ten years is that the County Board members see losses on the balance sheet – the County has transferred $2.1 million ($207,040 annual average) to Golden Age over the past 10 years. If the projections are accurate, Golden Age will realize a profit for 2008 due to numerous factors including a change in billing by a new therapy contractor.
A key question: what happens if the Golden Age Manor becomes a private nursing home? The number one responsibility of the private owner is to make a profit for its owners. To accomplish this at Golden Age Manor, there will be many difficult decisions such as to reduce costs and/or change the revenue sources. Based on what happens in other private nursing homes, they could cut employee wages and benefits or reduce the number of Medicaid patients. The Alzheimer’s unit could be converted to another use because of the high cost of operation.
No federal funds will be available to cover the extra costs no longer being reimbursed. I repeat that the federal funds will no longer be available to the Polk County economy if a private nursing home replaces Golden Age. The federal funds create a significant economic impact in Polk County - an annual average of $547,207 over the last 10 years. Those funds pay for wages, benefits, supplies and other purchases; those purchases are turned over in the economy because the stores where the money is spent benefit, and they in turn are able to employ more people, make more purchases. That is the economic multiplier theory but it is real in Polk County. I am still checking how many times that money turns over in our economy but it is anywhere from 2 to 4 times and possibly higher. Some of those sales are subject to the half percent sales tax and contribute to Polk County revenue. Golden Age employees live in many locations in the County so the impact is not confined to the southeastern part of the county.
There is an additional revenue loss that occurs in this way: If all five nursing homes – all privately owned – turn away a Medicaid patient because they can’t provide the services, the County is liable under Wisconsin State Statutes (Chapter 51.42) for treating them at other out-of-county facilities that are equipped to accept them. Those facilities charge $740 per day and more. Polk County has to pick up the tab under the Human Services budget. If one person can’t be handled in a county facility, then the average annual loss of $207,040 would be exhausted in 279 patient days.
The County engaged in strategic planning last year and probably all County Board members would agree that the County needs to pursue economic development projects. Yet, it forgot that objective in trying to transfer the Golden Age Manor to private hands.
It is not easy to estimate the full economic impact of a sale but it is clear that the county transfers to cover past losses do not tell the full story.
JoAnn Hallquist
715-268-6134
Town of Lincoln
The federal government pays the government-owned nursing homes, not just Golden Age Manor, to stay in business through a program known as the Intergovernmental Transfer Program (now called Supplemental Payments Program). Those federal funds enter Polk County to help pay our county nursing home, Golden Age Manor, for the extra costs associated with a high percentage of Medicaid residents – costs that are above and beyond the inadequate reimbursement under the Medicaid program. Those funds have totaled $5.5 million over the last 10 years.
Everything was fine as long as Golden Age Manor made a profit and contributed to the county coffers. The problem of the last ten years is that the County Board members see losses on the balance sheet – the County has transferred $2.1 million ($207,040 annual average) to Golden Age over the past 10 years. If the projections are accurate, Golden Age will realize a profit for 2008 due to numerous factors including a change in billing by a new therapy contractor.
A key question: what happens if the Golden Age Manor becomes a private nursing home? The number one responsibility of the private owner is to make a profit for its owners. To accomplish this at Golden Age Manor, there will be many difficult decisions such as to reduce costs and/or change the revenue sources. Based on what happens in other private nursing homes, they could cut employee wages and benefits or reduce the number of Medicaid patients. The Alzheimer’s unit could be converted to another use because of the high cost of operation.
No federal funds will be available to cover the extra costs no longer being reimbursed. I repeat that the federal funds will no longer be available to the Polk County economy if a private nursing home replaces Golden Age. The federal funds create a significant economic impact in Polk County - an annual average of $547,207 over the last 10 years. Those funds pay for wages, benefits, supplies and other purchases; those purchases are turned over in the economy because the stores where the money is spent benefit, and they in turn are able to employ more people, make more purchases. That is the economic multiplier theory but it is real in Polk County. I am still checking how many times that money turns over in our economy but it is anywhere from 2 to 4 times and possibly higher. Some of those sales are subject to the half percent sales tax and contribute to Polk County revenue. Golden Age employees live in many locations in the County so the impact is not confined to the southeastern part of the county.
There is an additional revenue loss that occurs in this way: If all five nursing homes – all privately owned – turn away a Medicaid patient because they can’t provide the services, the County is liable under Wisconsin State Statutes (Chapter 51.42) for treating them at other out-of-county facilities that are equipped to accept them. Those facilities charge $740 per day and more. Polk County has to pick up the tab under the Human Services budget. If one person can’t be handled in a county facility, then the average annual loss of $207,040 would be exhausted in 279 patient days.
The County engaged in strategic planning last year and probably all County Board members would agree that the County needs to pursue economic development projects. Yet, it forgot that objective in trying to transfer the Golden Age Manor to private hands.
It is not easy to estimate the full economic impact of a sale but it is clear that the county transfers to cover past losses do not tell the full story.
JoAnn Hallquist
715-268-6134
Town of Lincoln
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