Board backs nursing home despite monetary losses

Though the Wallowa Valley Care Center is losing money, these residents are receiving some of the best nursing home care in the state. Pictured left to right are Dick Marshall, Jean Johnson, Alene Alford and Esther Horner. Photo by Rocky Wilson

The Wallowa Valley Care Center, a nursing home physically and financially attached to Wallowa Memorial Hospital in Enterprise, is a money pit.

The nursing home has always been a financial drain to the Wallowa County Health Care District and, for the foreseeable future, will continue to be so.

But the benefits of having a long term care facility in the community are many, and efforts are being made to reduce the care center's losses. In fiscal year 2002 the Wallowa Valley Care Center lost $601,000. The goal is to cut that deficit to $200,000 in the foreseeable future, a figure much more palatable to administration and members of the board.

Because Wallowa Memorial Hospital is a critical access hospital the federal government guarantees a return of 60 to 70 percent of hospital costs. Critical access does not reimburse nursing homes.

Hospital CEO Larry Davy says that "long term care is seriously underfunded." This is especially true of Medicaid facilities, like the Wallowa Valley Care Center, which he describes as "a guaranteed (financial) loss."

Medicare facilities, on the other hand, says Davy, can break even. The Medicare classification covers a Skilled Nursing Facility (SCF) where additional nurses are required and patients need more one-on-one care. The Wallowa Valley Care Center is one step lower, designated as an Intermediate Care Facility (ICF), which is funded by patients or Medicaid. Medicaid pays considerably less than the actual costs of providing ICF care.

Recent studies by Davy and his staff have determined a second, more treatable cause of care center financial difficulties. The fact that the nursing home is physically attached to the hospital, coupled with accompanying state accounting laws, forces the hospital to attribute costs to the care center which should realistically go to the hospital, says Davy. The CEO estimates that $400,000 to $500,000 of the $601,000 loss in fiscal 2002 "should have stayed on the hospital side."

The misleading legalese has to do with square footage requirements in the volumes of paperwork the hospital and care center must submit to state and federal regulators. Determined by square footage, a certain percentage of expense for each department must be attributed to the care center. For example, Davy's administration department might have to charge off 30 percent of his costs to the nursing home while more realistically 10 percent of his office's time is spent on care center duties. Similar analogies can be made in the other hospital departments such as housekeeping, dietary, laundry, laboratory and radiology.

The only other joint hospital/nursing home facility Davy could name in Eastern Oregon facing the same financial problems is in Heppner.

Recent expansions in Wallowa Memorial's laboratory, radiology and administration departments will only add to the square footage monetary problem, as much as another $100,000 a year according to an auditor's estimation.

Davy is believes care center losses could be reduced to $200,000 a year if a new hospital is built separate from the nursing home.

Built on to the hospital in 1965, the nursing home now has 32 beds and a long waiting list of patients seeking admission. If a new hospital is built it is anticipated that the care center could generate more revenue by expanding on the grounds to 40 beds. Beyond that figure is financially unfeasible, says Davy, because of increased staffing requirements, including the need to have a full time care center administrator.

If the hospital building is closed the additional space could conceivably be used to create a health unit not available in Eastern Oregon such as an Alzheimer's Care Facility or a Senior Psychiatric Ward.

The Wallowa County Health Care District board has consistently expressed its support of the care center, no matter the financial drain. Keeping elderly patients close to home provides a convenience to families that cannot be measured in dollars and cents. Yet losses of $601,000 a year cannot be absorbed indefinitely.

State Department of Human Resources surveys over the past several years have consistently rated the nursing home care given in Enterprise as some of the best in the state. Davy says the driving philosophy at the care center is to provide care above and beyond state requirements, including staffing above state mandates. "We could cut costs, but we do not want to cut the quality of care," he said.

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