Friday, February 09, 2001
Ohio nursing homes may lose $250M
Plan cuts Medicaid spending
By Debra Jasper
Enquirer Columbus Bureau
COLUMBUS Ohio pays too much money to nursing homes for care and needs to stop subsidizing services many older Ohioans don't want and aren't using, the state's Job and Family Services director said on Thursday.
Testifying before the House Finance Committee, Jacqueline Romer-Senky unveiled a plan to cut back projected Medicaid spending on nursing-home care by $250 million over the next two years.
Of that amount, she said $90 million could be saved by changing a complicated Medicaid funding formula that now helps pay for empty nursing home beds. She also said the state should do away with financial incentives to build more nursing homes.
What we need to do is right-size this industry, she said. Market forces, court cases and consumer demand (are) now moving toward home- and community-based care. That's where our waiting lists are.
Ms. Sensky's proposal comes at a time when Ohio's Medicaid program, the government's medical safety net for low-income families, is struggling to cope with increased caseloads, exploding prescription drug costs and other medical expenses.
The plan, part of the budget put forth by Gov. Bob Taft's administration, now goes to legislators for review.
Nursing home officials were quick to react to the proposed cutbacks, saying they would make it even more difficult to attract workers to care for patients and could force some nursing homes to shut.
We've got a tight labor market out there, and we're escalating wages at a greater pace than what Medicaid payments are covering now, said Mike Scharfenberger, executive vice president of Nursing Care Management, a Cincinnati-based company that operates 11 nursing homes, including two in Cincinnati.
Peter Van Runkle, president and CEO of the Ohio Health Care Association, said the state reimburses the average nursing home 95 cents for every dollar spent on resident care and the state's proposal would reduce that amount to about 92 cents. Nursing homes in Ohio get about $2.5 billion a year from Medicaid.
He noted that expenses don't necessarily decrease because some beds are empty.
The bank doesn't say, "Oh, you have empty beds so we'll lower your mortgage,' he said.
In addition, Mr. Van Runkle said some nursing homes may either have to pass more costs on to consumers or close.
Every facility in this state is going to be affected, he said.
These are people's homes. People become attached to them. It's easy to say we're going to close down nursing homes, but there is a human cost there.
The Cincinnati Enquirer revealed in December that while fewer seniors are using nursing home beds, state Medicaid payments to nursing homes averaging $47,000 per bed annually went up, not down, in the 1990s.
In 1999, more than one of every 10 beds in Ohio's 980 nursing homes went unused on any given day. Meanwhile, enrollment in the Department of Aging's Passport program, which provides Medicaid funds to pay for personal care, Medicaid equipment and other assistance, is growing fast. The number of people in the program jumped from 7,600 in 1992 to 24,250 in 2000.
Mr. Scharfenberger acknowledged that occupancy rates are declining in Ohio but predicted that will change.
As the number of elderly people grows, the demand for those beds will be out there, he said. So if you take them out of the system now, you will end up putting them back in at a much higher cost.
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