York County eyes improvements to nursing home operations
A group of York County officials and community leaders are exploring ways the county-owned Pleasant Acres Nursing & Rehabilitation Center can shave costs and increase revenue to offset taxpayer subsidies.
For years the cash-strapped facility in Springettsbury Township has relied on subsidies from the county's general fund to keep afloat, and one commissioner believes the county can't sustain the home without raising taxes in the coming years and might have to sell it.
The home's overall 2016 budget has grown to $45 million, up from $43.3 million in 2015. Just under $7.7 million, or 17 percent, will come from the county's general fund.
"If we continue to run an $8 million deficit, I don't know anyone who can continue to look the other way," said Commissioner Chris Reilly. "How much can the taxpayers stomach in terms of a subsidy?"
A recent study found the county could expect to receive $35 million from the sale of the home, he said.
Between 2002 and 2015, the county has provided about $70 million in subsidies to Pleasant Acres, according to previous years' county budgets.
Task force: A recently formed eight-member task force, which includes local business leaders with health care or financial backgrounds, is charged with finding ways to reduce the county costs, but it won't explore selling the home, said county solicitor Glenn Smith, who heads the task force.
"The focus of the task force isn't whether we should keep or sell it," Smith said. "The focus of it is to make a neutral evaluation of the nursing home."
Some of the revenue-increasing and cost-reducing options the group is exploring include outsourcing the home's physical therapy unit, getting people who owe past-due bills to pay up and looking at ways to streamline admissions and the Medicaid application process.
Another possible recommendation is to change the perception of the home, which, since it is government-run, became known as the place to send loved ones who can't afford a private nursing home.
"When folks are looking for a home, they don't look at Pleasant Acres because that's known as the poor house," Smith said. "Feedback I've received from members in the health care industry was that they were impressed with the high quality of care. The home's employees do a fantastic job caring for residents."
The task force has met once so far, and additional meetings are planned. There is no timeline for when the task force will present its recommendations to commissioners.
Pleasant Acres is one of the largest nursing homes in the county, boasting 375 beds with an additional 32 independent care units. It employs 519 people — 461 full time and 58 part time.
Cause for hope: Vice President Commissioner Doug Hoke, who has been in favor of keeping the home, said he's hopeful the task force will set the groundwork to decrease the general fund subsidy.
He's also optimistic the county will get some aid from Harrisburg in the form of House Bill 1062.
The bill, which is now in the Senate, would repeal a provision that allows the state to withhold 10 percent of the Medicaid costs for residents in county-owned facilities, forcing the counties to make up the difference. The provision on the books doesn't apply to privately owned nursing homes. If repealed, it would mean an extra $2 million annually for Pleasant Acres.
"That (bill) will start us on the right track, and any recommendations from the task force would lead to decreasing the county subsidy," Hoke said.
Case for selling: Though the task force could find ways to shave costs, Reilly wasn't optimistic their findings would be a long-term fix.
"That (the county subsidy) is only going to get worse as the Medicaid reimbursement declines and employee costs continue to rise," he said.
If the county was to sell the home, it would expect a one-time windfall of $35 million plus yearly savings of about $8 million (the county subsidy) and $2 million in pension obligations, Reilly said.
"That's really a pretty compelling argument that it might be wise to sell the home," Reilly said, adding that money could be used to decrease taxes or pay off upgrades to the county's 911 system.
Smith said though the $35 million sale figure can be attractive, the county would still incur yearly costs for employee pension obligations if the home is sold.
A 2014 study by the Pennsylvania Association of County Affiliated Homes found that 23 counties operate nursing homes, and if they were all sold, it would cost the state $29.5 million in lost Medicaid reimbursements.
President Commissioner Susan Byrnes said she's looking forward to hearing the task force's improvement recommendations.
"We're not going to make any decision until the task force comes back with recommendations," Reilly said.
— Reach Greg Gross at firstname.lastname@example.org or on Twitter at @ggrossyd.