April 26, 2012 in City

Lincoln County senior facilities must close

Hospital district’s debt ate up funds
By The Spokesman-Review
 

Deep financial losses are forcing the closure of a nursing home in Davenport and an assisted living facility in Wilbur, Wash.

The moves will force 42 elderly residents to find new living arrangements and mark a difficult setback for the two communities west of Spokane along U.S. Highway 2.

Two years ago the nursing home, which is owned and operated by a public hospital district in Lincoln County, shrank from 75 beds to 35 beds to ease losses. Yet difficult funding scenarios never improved. The nursing home was run on a $3 million budget but collected only $2 million in revenues.

Tom Martin, administrator of the hospital district, said many of the elderly, including 32 in Davenport and 10 in Wilbur, will be moved to other facilities. That includes nursing homes farther from family. Others will return to the homes of their families for the intensive and intimate care they need.

“We’re just incredibly saddened by these developments,” Martin said. “No one wanted this to happen.”

In years past the hospital district would divert surplus funds earned from other units such as the adjoining hospital to subsidize the nursing home.

Now the hospital is losing money, too. It incurred $1.2 million in bad debts and charity care last year. Those write-offs drained any excess operating funds that could have been used to help the nursing home.

Martin said 85 percent of nursing home residents have their bills paid by Medicaid, the federal-state government insurance program designed to pay the costs of caring for the poor. Because nursing home care is so expensive, even those seniors with life savings find that it isn’t nearly enough and become reliant on Medicaid to pay the bills.

The reliance on Medicaid is a trend reversal from 25 years ago when, Martin said, 85 percent of nursing home residents were private pay patients and just 15 percent relied on Medicaid.

But the cost and regulations of nursing home care have grown rapidly and outpaced the ability of many rural residents to adequately fund their needs. And the costs have outstripped the ability of government programs to offer reimbursement rates that keep pace with health care inflation.

The financial problems in Davenport became so great for the nursing home and the district last year that the board of the hospital district had to raid its reserves to meet payroll.

“That’s a cold splash of water to any board,” Martin said.

Lincoln County taxpayers already pay $500,000 each year to support the hospital district. The board chose to not ask voters for more money.

“We struggled with the decision,” Martin said. “Everyone on that board knows people in the nursing home, and some even anticipated having family in there someday. In some cases, some board members were looking down the road of perhaps being there themselves.”

The nursing home closure in Davenport will put about 60 employees out of work in June.


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