Once again something comes out of the woodwork that makes no sense to the average New Yorker. Looks like we still need to keep an eye on what's going on in Albany.
(This story reprinted from last week's paper)
We can't afford it, so why build it?
Originally Published: Tuesday, November 22 2011, 4:22 AM
For a perfect example of how New York earned its reputation as the Vampire State, look no further than what’s going on in Albany County, the seat of state government.
Officials there are getting ready to spend $70 million on a replacement for their aging money pit of a nursing home, even though the new facility, by their own estimate, will lose a staggering $26 million a year, or 51% of its operating budget.
I’m not making this up.
County officials project fees from Medicare, Medicaid and private payers will cover less than half the costs of the new home — thanks to a bloated payroll, impractical work rules, plush benefit packages and all-around bad management.
So the county will spend $51 million annually while taking in just $24 million. The losses alone will pile up to the tune of $115,000 per patient, per year, which is more than the entire cost of a bed in most New York nursing homes.
Needless to say, a project this out of whack would never have gotten off the ground in the private sector. But Albany County pols have the option of sticking taxpayers with any unpaid bills — and that’s exactly what they intend to do.
Keep in mind that $26 million translates to almost one-third of Albany County’s property tax revenues. And the county even now is struggling to whittle down a proposed tax hike of 19%, or $14 million.
If this home opens, county taxpayers will be taking it in the wallet for years.
Despite all that, regulators at the state Health Department were ready to sign off on this disaster — reasoning that how badly a county abuses its taxpayers is its own business.
“It appears that the applicant has demonstrated the capability to proceed in a financially feasible manner,” the bureaucrats opined before a key meeting last week.
Are they nuts? Are they not aware out-of-control health-care spending is slowly bankrupting New York, not to mention the rest of the country?
Did they not know their chief executive, Gov. Cuomo, has promised to crack down on exactly this kind of brain-dead waste?
Have they not heard about Cuomo’s cap on property taxes — which was supposed to stop local officials from treating taxpayers as bottomless ATMs?
Health-care finance expert and blogger John Rodat calls the whole scenario “incredibly foolish.”
“There’s no reason to expect better of the Albany County Legislature,” Rodat wrote. “But now [the Health Department\] is about to be complicit and, in so doing, undermine one of Gov. Cuomo’s signature policies.”
Thankfully, a panel of outside advisers balked at approving the plan on Thursday — postponing a decision until January so everyone responsible could get a clue.
Panel member Howard Fensterman pointed out the state is on the verge of overhauling its Medicaid rate schedule for nursing homes, which will probably lead to even bigger losses for Albany County.
And panel member Robert Hurlbut flatly urged Albany to sell or close the facility, as many other counties are doing.
“They simply can’t afford to do it anymore,” Hurlbut said. “It’s like making buggy whips. They’ve got to go.”
What makes county-run homes unaffordable is labor costs — especially “a benefit package that exceeds those found in the private sector,” as Health Department officials put it in their analysis.
On top of that, as Rodat explains, the Albany County labor contract requires staffing levels far higher than industry norms.
Not that you can tell from ratings on Medicare’s “Nursing Home Compare” website. Albany County Nursing Home scores four out of five stars for staffing levels, but a below-average two out of five stars for inspection ratings and performance on quality measures.
Traditionally, though, the Health Department has what Rodat calls a “laissez- faire” policy on financial issues. If county officials want to rack up huge losses and stick taxpayers with the tab, it’s up to them.
That policy “is now terribly out of sync with the times that demand governmental financial constraint,” Rodat wrote.
He’s right. If Albany County officials won’t call off this boondoggle, Cuomo’s Health Department will have to do it for them.