Counties stand by sale of homes
Critics of Butler County’s pending sale of the Sunnyview Nursing and Rehabilitation Center say it will hurt the facility.
However, other Pennsylvania counties that already sold nursing homes stand by their decisions.
The union representing Sunnyview’s 200 workers disagrees that privatization is beneficial.
Matt Yarnell, vice president of SEIU Healthcare, said staff cuts and a reduction in the quality of care for Sunnyview residents are inevitable.
Yarnell said the numbers culled from federal Medicare and state Medical Assistance indicate negative results every time.
He said privatization causes a cultural shift.
“The home doesn’t feel like a home anymore,” Yarnell said.
He said a privatized home’s new owner won’t throw any resident out on the street, but could restrict new admissions.
“The county took anybody,” Yarnell said.
The SEIU points to federal data indicating the overall quality ratings for privatized homes in Pennsylvania are below or far below average.
Yarnell said the push for counties to privatize homes is likely spurred by companies seeking the acquisitions.
“I think their phones are blowing up by people wanting to buy,” he said.
County officials are negotiating with Investment 360 of Lakewood, N.J., to sell Sunnyview, which has an annual deficit hovering around $1 million.
The county won’t divulge any details, including what the company’s offer is for the 220-bed nursing home.
But here is what happened when county nursing homes were sold in five other counties.
Beaver County
Beaver County is in the process of selling the Friendship Ridge nursing home for $37.5 million.
SEIU is negotiating with Comprehensive Health Care Services, which is buying the 600-bed nursing home. The closing is set for midnight Feb. 28.
Yarnell said the company is proposing 90 changes to the contract workers had with Beaver County — the most he’s seen in 11 years of union negotiating.
Beaver County Commissioner Tony Amadio, board chairman, said the sale is necessary.
“It just became economically unfeasible,” Amadio said.
He said the annual loss ranged from $1 million to $1.5 million.
Amadio said continued state and federal funding cuts make it too difficult for government to sustain nursing homes.
“You’re going to see most counties selling their homes,” he said. “It will continue to happen.”
He stressed county officials are concerned with Friendship Ridge’s residents.
“The residents are our number one priority,” Amadio said.
He said the buyer selected was the right choice.
“We were satisfied with the group we chose,” Amadio said.
However, the county last week overrode a decision by the company to cut 18 workers, a mix of nurse aides and cafeteria workers.
The county previously granted permission for the company to replace the workers with temporary staff from an agency.
But Friendship Ridge employees last month told county officials that patient care was suffering as a result of the cuts.
Amadio said the problem was the result of Friendship Ridge staff and agency staff calling off work.
“There was an excessive amount of call offs,” he said.
Although Amadio conceded union workers aren’t happy with the pending sale, he described the call offs as normal.
“It was better to bring all those people back,” he said.
Amadio said the situation doesn’t support the union’s claim that the home would suffer from privatization.
He said the company would likely increase staff in the long run.
Cambria County
Cambria County sold the Laurel Crest nursing home, which had a roughly $8 million deficit, in 2009 to Grane Healthcare of Pittsburgh for $14.25 million.
Yarnell said the sale of the 370-bed nursing home hurt workers because the medical staff no longer has union representation.
“They basically busted the union,” he said.
Yarnell said the sales agreement didn’t specify keeping the union, so federal court upheld the dissolution of the union.
One of Butler County’s conditions for the Sunnyview buyer is it must recognize the union.
Cambria County Commissioner Doug Lengenfelder, who was not in office when the sale occurred, said he’s received fewer than 10 complaints per year about the privatized home.
While Lengenfelder sees the rational behind the sale, he said Cambria did not factor the financial impact of trimming its staff.
Lengenfelder said a cost analysis should have been done to anticipate expenses such as potential retirements.
“They didn’t do anything,” he said about the county.
There are more retirees, 1,104, than employees, 800, in Cambria.
Lengenfelder said the problem was worsened by the federal government’s extension of unemployment benefits.
Butler County did commission an actuarial study to determine the potential amount that would be needed to be placed in its pension fund if all Sunnyview workers eligible for retirement did so.
According to Commissioner Bill McCarrier, that number is more than $2 million.
Lengenfelder said those types of actions should have been done in his county.
“It sounds like Butler is taking a smart approach,” he said.
Butler County has received criticism for not holding special meetings to seek public input on the Sunnyview sale.
Lengenfelder advocates the use of extra meetings devoted to such an important issue.
“Talking with the public is extremely important,” he said.
The Butler commissioners did discuss Sunnyview at regular meetings that covered other county business.
Lengenfelder agreed with Butler’s tactic of keeping negotiation details under wraps.
“That becomes much more sensitive,” he said.
Lackawanna County
Lackawanna County sold its nursing home for $13.4 million to Millenium Management of Miami in 2010 because of fiscal concerns.
Tom Durkin, county chief financial officer, said the Lackawanna County Health Care Center lost $50,000 to $250,000 annually from 2004 through 2009.
But the financial loss wasn’t the only issue.
“It wasn’t just the deficit,” Durkin said. “The potential liability was extraordinary.”
He said a potential legal problem arose when a nurse’s aide left a resident alone on a commode. The resident then fell, breaking a bone.
Although that case didn’t result in legal woes, it did scare officials, Durkin said.
Daily operations at the 272-bed facility also was a concern.
“We had a problem keeping nurses,” Durkin said.
According to Durkin, the combination of issues caused the commissioners to opt for sale.
“Professionals do a better job running nursing homes,” he said.
Lackawanna heard more complaints about privatizing the home before the sale happened than after.
Durkin said the nursing home workers reacted badly upon hearing a sale was forthcoming.
“They were really upset when they found out it was being sold,” he said.
Although 20 workers out a total 320 retired, the county is unaware of any significant staff cuts. A couple administrators were let go.
“It wasn’t a rash of terminations,” Durkin said.
Carbon County
Carbon County sold the Westwood Nursing and Rehabilitation Center for more than $11 million in 2010 to Guardian Elder Care of Luzerne County.
Carbon County Commissioner Bill O’Gurek, who was chairman at the time, said the home was losing $3 million.
“It was costing us about 2 mills a year,” O’Gurek said about the impact on property taxes.
Along with federal reimbursement cuts for Medicare patients, the home was not filled. O’Gurek said roughly 60 beds out of 200 were empty.
“We were surrounded by a number of nursing facilities,” he said about competition from the private sector.
O’Gurek said injury liabilities also were a concern. He pointed out the insurance premiums dropped considerably after the home was sold.
Employee benefits was another factor. O’Gurek said employees’ co-pay for a family package, which cost the county $1,400 monthly, was only $520 annually.
“We wanted to get out of the business,” O’Gurek said.
He said the county is satisfied with Guardian.
“We think they do a nice job,” O’Gurek said.
He said the company increased the services proved to residents by enhancing therapies.
According to O’Gurek, people have not expressed dissatisfaction to the county about conditions at the privatized home.
“We have not received any complaints,” he said.
O’Gurek said covering possible retirements wasn’t a concern because the county pension fund was fully funded.
Carbon did pay out money for employees who had more than 10 unused sick days.
The sale did result in political fallout, though. O’Gurek attributed the privatization as the reason he is no longer chairman.
“It caused me to take a hit politically,” he said.
Although Carbon did not disclose the offers made for Westwood, it did release the names of the companies when the search for a buyer was narrowed to five.
Adams County
Adams County sold the Green Acres nursing home to Transition Health Care of Maryland in 2011 for $6.1 million.
Albert Penska, Adams County manager, said the home’s annual deficit ran between $1 million and $2 million.
“That’s what motivated the sale,” Penska said.
Since the sale of the 135-bed nursing home, Adams has not heard any grousing.
“We’re not receiving complaints,” Penska said.
While there has been no griping after the sale, Penska said there was tension beforehand. However, he attributed that to a residual effect from a countywide property reassessment.
Penska said Adams weighed the immediate cash drain of operating the nursing home versus sales-related costs such as the prospect of more retirees.
He pointed out having a money-losing facility has other financial impacts, including affecting a county’s bond rating.
Penska said a major issue for most counties is they have only one nursing home.
“You don’t get efficiencies operating one facility,” he said.
Although Green Acres’ 150 workers weren’t unionized, the company agreed to retain the staff.
