Economics was never my strong suit — matter of fact, the only graduate school class I dropped was macroeconomics. Having said that, I can figure out simple math and budgeting, and really do understand the concept of cost-effectiveness and value. I can look at the most recent state bulletin listing the cost-of-care rates for state operated services and clearly understand that the state seems to “value” incarcerated individuals over frail seniors who haven’t been sent to prison.

Here is what I see:

The average per diem rate of non-state-operated nursing facilities is about $163 per day, but that includes the surcharge payments (where we “filter” the money rather than receive it as money to spend) and long-term care consultation payments (where we pay for all sorts of state and county “consultation” services and can’t spend this money either), so let’s say the average rate is $150 per day, or $6.25 per hour. What does that amount buy: a full range of health care services, meals, housekeeping, maintenance, activities, and social services. That is not much money when you think about all of the required staffing and services, and the increasing acuity of the folks being served in nursing facilities.

It is no wonder that the gap between what it costs to care for older adults in nursing facilities and the payment for the service continues to grow — the gap is now at $25 per day. It is no surprise that the pay scales we are able to reach are nowhere competitive with the pay for staff working in state-operated settings. Consistently throughout the state, nursing assistants’ starting wages are about $10/hour, and the maximum rate for those who’ve worked years at this job barely reaches $15/hour.

Now shift to the state-operated services.

Remember, this is the same state that continues to cut back on various health and human services programs . . . the same state that repealed promised rebasing increases for nursing facilities . . . the same state that has kept the rates for nursing facilities frozen for all practical purposes for three years and counting. The state announces their increases for state-operated services for each fiscal year by dividing the sum of all anticipated costs by the projected patient pays — sort of like a cost-based reimbursement system. Although several of the per diems calculated were actual reductions from the prior year (Minnesota Security Hospital decreased from $618 to $561 as one example) the rates are still difficult to accept, especially for non-state providers in their communities who are competing for a limited pool of qualified staff.

The new state-run nursing home in St. Peter has a per diem of $600 per day, or $25 per hour. The St. Peter state nursing home is gearing up to serve 42 residents. Let’s calculate: 42 residents at $600 per day = $9.2 million. What can you do with that amount? Well, for starters they are hiring staff at a wage and benefit package that can’t be matched by any privately run organization — over $15 plus benefits for starting nursing assistants. It is a rare occurrence these days for nursing facilities to be able to pay for health insurance benefits for their employees, so the “value” of a state facility job that includes affordable benefits far exceeds the $31,000 salary for a nursing assistant. They also have a staffing ratio that far exceeds the ratios even the highest staffed non-state facility can afford.

The residents in the state-run nursing home and the residents in non-state run nursing homes have the same care needs — the only difference is that residents in the state-run facilities will receive arguably better care because they are incarcerated!

What sort of message does that send?

Post a comment on this issue online here for me and others to read, or send your comments to me. I want to know what you think about this!

Patti Cullen, CAE
952.851.2487
pcullen@careproviders.org

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