Deficit Staggers Nursing Home

Operating Loss of $500,000 Is Mainly Attributable to Loss of Medicaid Payments from the State

Gazette Senior Writer

Leaders at the Windemere Nursing Home and Rehabilitation Center announced this week that the Island's only nursing home ended its fiscal year with a staggering $500,000 operating loss, more than $300,000 over the projected loss for the year. About half the loss can be traced to retroactive cuts in Medicaid reimbursements.

Senior managers at the nursing home have known about the cuts since last summer and said this week that they are still hoping to have the cuts reversed.

"Medicaid cuts were supposed to go into effect July 1 - the state never really came to a decision until August or September, but they were retroactive back to July 1. We have been trying to get our rate reinstated, and we are hoping that once the dust settles we can get these rates put back," said Windemere executive director Philip Hickey yesterday.

But the news from Beacon Hill yesterday was far less sanguine, with Gov. Mitt Romney announcing a drastic package of $500 million in emergency state budget cuts including $133 million in cuts targeted for health and human services. The newly elected state governor said he will ask hospitals and nursing homes to pick up a larger share of health costs.

"I'll ask citizens who receive free medical care to contribute a share of its cost. Some health services will be pared back. Providers, like hospitals and nursing homes, will also be asked to share in our emergency reductions," Mr. Romney said in a speech to the commonwealth on Wednesday night.

Mr. Romney also said that in the coming fiscal year he plans to charge Medicaid recipients copayments for services.

The vast majority of Windemere residents - about 70 per cent - are on Medicaid.

Windemere has been plagued by stubborn financial problems since the day it opened in 1994.

The nursing home ended its 2002 fiscal year on Dec. 31. Total operating revenues for the year were $4.61 million, down slightly from total revenues of $4.68 million in 2001. Total expenses were $5.1 million, about the same as the year before.

For the last two years, Windemere has been way off its budget projection for revenues. In 2001 the nursing home projected $4.85 million in total revenues but brought in only $4.6 million. Last year the shortfall was worse: Budget projections called for $4.88 million in revenues, but actual revenues came in at $4.6 million.

Mr. Hickey said he could not comment on the budget projections because he they were developed before he took the helm at the nursing home early last summer. He said the $271,000 gap between projected and actual revenues can be tracked almost entirely to Medicaid cuts, although he said the nursing home also did not meet its occupancy projections for the year.

The nursing home has 81 beds, including 20 assisted living beds and 61 skilled nursing beds. There are 79 residents. Last year one unit was closed in the nursing home as a cost-saving measure, eliminating 25 beds. The unit is now used as office space for surgeons.

But the cost-saving measures have done little to stem the flow of red ink at Windemere, which shares a campus with the Martha's Vineyard Hospital and is a business affiliate with the hospital.

If the Medicaid cuts cannot be reversed, Mr. Hickey said the nursing home may need to turn to the hospital for help.

"We are as lean as we can get right now - there is no fluff - and it would be the hospital helping us. We are part of a health system and that is how we need to look at the health care on this Island, because the hospital and Windemere work very closely together," Mr. Hickey said.

"We are hopeful that these Medicaid rates will be restored, " said Fred Condon, an Edgartown resident who is vice chairman of the Windemere board of directors. "We've got to find a way to make this work," he added.

"Our Island people desperately need Windemere - there is no place for them to go," said Jack Ross, an Oak Bluffs residents and member of the Windemere board.

Historically, Windemere has attracted little in the way of gift money, and board members have tried to change that in the last two years with a number of fund-raising appeals. But the appeals have yielded relatively modest amounts of money, especially compared with the hospital, which collected more than $1 million in charitable contributions last year.

"We give money to so many causes on this Island, but Windemere gets forgotten," Mr. Ross said.

Mr. Ross and Mr. Condon said they are working on a plan to turn around the heavy losses at Windemere. Meanwhile, leaders at the nursing home put out a plea to the members of the Island community this week to add their voices to the din on Beacon Hill.

"I would ask the community and people who live on the Vineyard to write their local representatives and senators to get the rates back. They need to know how necessary it is to have Windemere," Mr. Hickey said. He said the nursing home is projecting a $364,000 loss for the coming year. "Without our state Medicaid rates, we are in trouble. Our staff does an exceptional job at care - I have been here a little over six months and I have not received one complaint about care. That's not common in today's health care industry. We are very lucky; our staffing is very good at Windemere and we want to keep it that way," he said.

"We can't afford to lose our wheels," said Mr. Condon.