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Champaign County Nursing Home

Whether the County should continue to own the Champaign County Nursing Home is a difficult and complex issue that recently reached a crisis point with facets consisting of political, financial, operational, and emotional concerns.

State law requires County level government to provide a significant number of services to County residents for reasons of public safety (e.g. public health, roadways, law enforcement, and emergency preparedness) and the collection and safekeeping of public records (e.g. vital statistics, deeds, court records, and elections). At their discretion (and according to their willingness to fund such initiatives), local voters also authorize County government to provide other services, which often change over time. Currently, some basic political differences exist about whether Champaign County should continue to provide nursing home services. 

Starting with the question of why County voters would be motivated to pay for an optional service, my research over the past 6 months resulted in the following conclusions regarding some basic questions:

Is this a unique service not available in the private sector? No. There are 50 Medicare/Medicaid licensed beds in excess of expected demand in our region, even with a growing senior population, due to the increased availability of other types of health services preferred by consumers. Keeping our facility operational remains important, however, as the Illinois Department of Public Health projects that without the County’s 243 beds, a shortage of 193 Medicaid beds will develop for East Central Illinois by 2020. In the meantime, though, the County nursing home finds itself competing with private homes in the area until all privately available beds are full.

Does the facility provide jobs that would be lost? No. If the facility is sold, approximately the same number and types of jobs will remain in the County to serve residents here. Jobs provided are dependent on the facility remaining open and the number and/or acuity of residents served.

Can the County provide this service more effectively and efficiently than the private sector? No. For almost 10 years, the County hired private firms to manage the nursing home, without experiencing improvements in quality measures, consumer demand or its financial situation.

Does the County need to provide this safety net for low-income seniors? No. Counties took on the responsibility for skilled care for low-income seniors prior to the passage of Medicare/Medicaid at the Federal level, which now provides a safety net nationwide. On May 1, 2018, our nursing home census consisted of approximately 100 Medicaid-eligible and 45 private pay residents. 

Upon announcing my candidacy for County Executive, I began investigating the financial situation at the nursing home, which has reached a critical juncture. This examination answered an additional set of critical questions:

Does the County subsidize the nursing home? Yes. Public services are totally supported or partially subsidized by taxes. Because it also generates business revenues, the Champaign County Nursing Home is set up as an enterprise account which taxes partially supported for decades. The percentage of the County budget supporting the home only increased over the years, as costs grew faster than revenue. In the past when requiring additional funds, the voters passed referenda to increase either property or sales taxes for a larger subsidy. The current year’s subsidy amounts to almost $4 million to pay off 2006 construction bonds; to cover emergency repairs, insurance, employee contributions to the Illinois Municipal Retirement Fund (IMRF) and Social Security, and debt service to vendors; and to provide care to the 45 residents who are waiting for Medicaid approval from the State (resident census May 2018).

Does the County have funds to provide this service? Not without enacting the previously used strategy of asking voters for a tax increase. Additionally, the County will need to cut back on other services provided by County funds in order to maintain the current nursing home subsidy until the next election in November 2018.

Will the nursing home always need a subsidy? Yes. While Medicare covers costs of services provided, Medicaid rates are often lower than the cost of providing care. Software and procedures can help track services better to claim more revenue, but the larger rate-setting issue the County cannot change. Until Federal or State lawmakers address this discrepancy, providers that accept Medicaid residents must find other ways to generate revenue in order to “break even” such as tax subsidies, providing higher paying care specialties for Medicare and private pay consumers, or providing ancillary or unrelated services that generate more revenue than their costs (locally we’ve tried adult day care, childcare, renting vacant nursing home space, among other ideas).

I considered the case that the nursing home would remain under County administration and turned to its operation for additional questions.

Is the County structured to manage a nursing home? Not in today’s market. The County has owned the nursing home for over 150 years through a transition from the County Home (for indigent persons) to the County Nursing Home to provide skilled nursing care and increasingly the addition/closing of ancillary services such as adult day care, child care, and rehabilitation (to name a few) as the health care field experienced significant changes. Efforts to hire two professional management firms to keep ahead of more complex licensing and payer requirements resulted in neither increased census, resident satisfaction, nor kept up with rising costs.

How about quality of care for residents? Our nursing home currently possesses an Illinois Department of Public Health “star rating” of 2 on a scale of 1-5. (Controversy exists about the fairness of this rating system, but it remains consistent across IL.) The four privately-owned nursing homes in the County that accept Medicaid residents hold ratings of 1, 2, 2 and 4 stars.

What about staffing concerns? Of a total payroll staff numbering 225, 191 of these staff are eligible for IMRF retirement benefits (May 2018). Because of high turnover rates, only 25 people possess the 8-year tenure to be vested. Our nursing home uses temp agency staff when needed, a more expensive solution to workforce shortages and fluctuations in resident needs.

What can the County do that a private owner can’t accomplish? Counties can raise taxes to pay for services that are not otherwise financially feasible in the open market.

I then considered the case of selling the nursing home and more questions arose.

What are the current bidders’ credentials? When the Request for Proposals Review Committee forwarded the current proposal submitted by Altitude Health Services and Extended Care Clinical LLC to the County Board, the committee certified this bid as responding to all questions and conditions set forth in the County’s RFP. Conditions included keeping all current residents, continuing to accept County Medicaid residents, and hiring existing staff at their current wages for specified time frames. Altitude buys and leases properties for the purpose of operating nursing homes and additionally sometimes provides management support services under contract to the operator of the home for billing, purchasing and legal services. Admittedly, some raised concerns regarding existing operators providing poor care. Extended Care provides clinical staffing, licensing assistance and operational expertise at some of Altitude’s properties. The 18 Extended Care facilities in Illinois and Indiana earned IDPH star ratings of 1-5, mostly 3.

What could a private owner do that the County can’t accomplish? Private companies that own several homes and specialize in their operation can realize some efficiencies of scale on purchasing, recruiting, training, information technology, and legal services. They oftentimes make decisions more quickly than large public bodies. They fairly compete for business against other businesses, and they pay property taxes.

Initially, financial deficits prompted the discussion about possibly selling the nursing home, but emotional complications also exist. Some County residents (or their loved ones) lived in the nursing home during times when it performed well as well as periods of poor performance. Some County residents invested a significant amount of time in past years raising awareness about the home’s finances and services, volunteering at the home with residents, and working at the home. Psychologically, people often find it more difficult to discontinue a service (equating such decisions with “giving up” or “failure” or “taking away something”) than to start a new one (which we typically see as “growing” or “getting” or “thriving”). 

Reframing the conversation to deliberately consider the following questions opens up some creative solutions, which I think we’ve been missing in the conversation so far.

If we didn’t have the nursing home already, would we start one now to fill a need? No.

Are there other ways (not covered by Medicaid) to assist our low income seniors? Yes. I can think of several other methods of accomplishing this feat, if we had funds, with the goal of keeping seniors at home longer (a preference for the majority of seniors). One such idea involves providing vouchers to hospital social workers to use for common needs such as transportation, someone to check on medications, mental health services, nutrition, pharmacy and dental assistance, respite for family caregivers, and help with house or yard chores. This system would help seniors who typically "fall through the cracks" of other available funding sources and support our existing network of service providers.

After asking myself (and many others) these questions over the past few months, I arrived at the conclusion that for the many reasons outlined above, continued County ownership is not the best way to assure sustainable operations that benefit residents, staff and our community. That’s how I, as a life-long Democrat with a strong commitment to the most vulnerable people in our community, can support selling the nursing home at this time.

My Response as County Executive

Develop a 6-year plan with measurable milestones for finances, facilities and operations. County residents deserve a comprehensive budget strategy with a longer timeframe than the next election to secure the County’s future well-being. Additionally, I would look for ways the County can support local service providers to fill gaps in need for seniors, particularly low-income seniors.

My Experience

  1. Served for 15 years as the Community Services Director of the Champaign County Regional Planning Commission

  2. Ability to develop mutually beneficial working relationships with others in the region

  3. Hands on experience with complex budgets and Champaign County government

  4. Inclusive and effective track record of developing innovative approaches to problem-solving

Additional Information

Champaign County Board meeting schedule and minutes:  http://www.co.champaign.il.us/CountyBoard/meetings_CB.php

Nursing Home Budget Summary for FY2018 Budget Hearing:   http://www.co.champaign.il.us/CountyBoard/Budgets/2018Budget/Final/Pages/081-000.pdf

RFP Review Committee meeting minutes:   http://www.co.champaign.il.us/CountyBoard/meetings_RFP2018_001Evaluation.php


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