Lawyer: Privatizing health center would reap nearly $1.8 million in county, local and school revenue
Attorney Mark S. Stewart spoke to Washington County commissioners Thursday about receiving proposals for the sale of the county health center.
Jill Murphy, a licensed practical nurse at Washington County Health Center, speaks against the sale of the facility during a meeting Thursday.
Washington County commissioners moved one step closer to privatizing the health center, voting 2-0 Thursday to seek proposals and qualifications from a firm to market the 288-bed facility in Arden, Chartiers Township.
Commission Chairman Larry Maggi and Vice Chairwoman Diana Irey Vaughan cast their votes after hearing a 25-minute presentation from a lawyer working under contract with the county outlining a bleak financial forecast for the health center, which has not operated in the black since 2010.
The county’s subsidy to keep the health center operating in 2015 was $3.2 million, a figure attorney Mark S. Stewart projected could reach $4 million this year.
Commissioner Harlan Shober, who became president of the County Commissioners Association of Pennsylvania on Jan. 1, was absent because of a meeting in Washington, D.C., of the National Council of County Association Executives and state association presidents.
The request for proposals, which is still being developed, will outline details of any sale, the requirements that a purchaser must satisfy and the process that will lead to selection of a potential buyer by the county.
In a news release, Maggi said, “Any decision we make will not be dictated solely by the highest bid. Maintaining or enhancing the health center’s high quality of care will be our top priority.”
Changes in Pennsylvania’s funding formula has left county nursing homes in the lurch. Stewart said county nursing homes have a higher and less flexible cost structure than privately owned facilities. Between 2010 and 2015, the health center’s operating expenses increased 11.3 percent while its revenue grew only 2 percent.
“County homes are heavily dependent on government payment programs,” Stewart said. “The state has changed those programs in ways that disadvantage county facilities.”
Approximately 65 percent of patient days in Pennsylvania nursing homes are paid by Medicaid and 13 percent are paid by Medicare. At the Washington County Health Center last year, the mix was 83 percent Medicaid and 4 percent Medicare.
Shannon Mahoney, a nursing assistant at the health center who has worked for the county for nearly 30 years, said she has also worked in the private sector.
“Make it a guarantee that the home will be admitting low-income seniors,” she told the commissioners. If the sale is inevitable, she asked that staffing levels do not decrease, that former employees are guaranteed their current wages and benefits, and that laundry and dietary jobs are not outsourced.
The county’s contract with the Service Employees International Union and SEIU Healthcare expired Dec. 31, but the members continue to work under the terms of the pact. Negotiations are scheduled for Jan. 11 and 17. In the meantime, union members will be going over an accounting firm’s report issued last fall with an eye toward cutting costs. More than 250 workers at Washington County Health Center are members of SEIU Healthcare Pennsylvania.
During the public comment segment of the commissioners’ meeting, local attorney Charles Kurowski spoke emotionally about his late parents’ stays at the health center, calling the level of care they received “phenomenal,” which drew a round of applause from a group of purple-shirted SEIU members.
Stewart, who has handled sales of county nursing homes elsewhere, mentioned instances where county employees were given first consideration for employment after privatization of a county home. He said in an interview that he is aware of situations in which wages for former county employees increased, but the benefit package was not as attractive.
“It may not be the case in Washington County,” he said. “We won’t know until we get the proposals. Seventy-one percent of the facility’s costs are tied to salaries and benefits. That’s not an uncommon figure for a county facility.”
The health center’s fringe benefit expenses to salaries percentage in 2015 was nearly double the statewide average, Stewart said, but the health center’s percentage was 24 percentage points higher than the countywide average.
Asked about the timing of the proposed sale and the end of the union pact, Stewart said, “I don’t think it was driven by the expiration of the contract here. I think it was more coincidence than causal.”
He called it a “myth” that patient care deteriorates when a county home is privatized. The Washington County Health Center has achieved a four-star rating from the state.
He speculated that the sale process could take nine months.
Kurowski alluded to changes in health care expected to come about in a President Donald Trump administration and asked the commissioners to wait to see what develops.
Stewart, after the meeting said, “The new administration in Washington is not talking about the issue that we’re talking about here. The Medicaid rates are not impacted by Obamacare or the Affordable Care Act. If there are changes to that law that end up being implemented, they’re not the things that impact this. There’s nobody talking about changing the Medicaid rates in a way that would advantage the counties.”
Changes in Pennsylvania law in 2006 and 2010 affected only county homes and “froze them in time, essentially where they were,” Stewart said. Forty-seven of the state’s 67 counties no longer own a nursing home.
The health center sale could include a 45-acre parcel on which the county, township and Chartiers-Houston School District could collect nearly $1.8 million annually in property taxes, based on current assessed value. The property is now tax-exempt. County officials who were looking at aerial maps of the property Wednesday said a one-story building on a parcel being prepared for Washington County Conservation District offices on Hickory Ridge Road would not be included in the sale.
The health center, which is more than 30 years old, offers skilled nursing, rehabilitation services, two secured Alzheimer’s units and adult day care.