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Care for the Caregivers

Albany County legislators consider privatization options to defray costs at the long-floundering county nursing home

by Erin Pihlaja on December 6, 2012 · 1 comment

When the Albany County nursing home was built in 1973 at 780 Albany Shaker Road, it was hailed as a $9 million “state-of-the-art” facility. Patients from the Ann Lee home and the Hun Memorial tuberculosis sanitarium were transferred to fill some of the 400 beds.

The Hun Memorial was closed, but the Ann Lee stayed open until January of 2008, after the Berger Commission reported to the New York State Department of Health that Albany County needed to downsize its facilities. Based on the commission’s findings, the Albany County nursing home decreased its capacity to 250 beds after it took the last of the Ann Lee’s remaining patients.

Once a solution to Albany County’s needs, in regards to its senior population who required medical supervision, today the nursing home is losing money in the range of $7 to $9 million per year, according to the Albany County Executive’s office.

“The Albany County nursing home has been an issue for more than a decade,” said Mary Rozak, Albany county spokesperson.

Former County Executive Mike Breslin wavered back and forth with his plans for the facility: At times during his tenure, he recommended closing the facility altogether; towards the end he seemed determined to build a new plant. That proposal was not meant to be.

“New York State denied the certificate of need for Albany County to build a new nursing home,” said Rozak. A certificate of need, according to the Department of Health’s website, is “a process that governs establishment, construction, renovation and major medical equipment acquisitions of health care facilities, such as hospitals, nursing homes, home care agencies, and diagnostic and treatment centers.”

The proposal for a new site was rejected in part because of projections that it would suffer losses of $24 million annually.

Albany County Executive Daniel McCoy is pushing county legislators to privatize the facility, and has signed a letter of intent with Upper Services Group, a firm that would take over operations at the nursing home. However, lawmakers recently removed $2 million from the 2013 budget that was set aside as part of the lease agreement between the county and USG. Contingency funds will be used for the home’s expenses for the next year.

“The county executive’s back is up against a wall,” said Rozak. “This [deal] will keep seniors in the nursing home and provide them a safety net, without breaking the backs of the taxpayers. It will save the county money to the tune of $70-$80 million over ten years. That’s the conservative estimate.”

But some lawmakers believe that the deal with USG is not the right answer.

“This is not a true privatization deal,” said Albany legislator Phil Steck. “It is quite nearly a government subsidization deal.” Steck cited other counties, such as Rensselaer and Schenectady, as being able to profitably run county-operated nursing homes, and questioned why Albany wasn’t able to do the same.

Because public homes generally take more patients who need a higher level of care than private homes do and “private operators look to cut costs,” he also questioned whether a private entity would maintain the care of the patients at the same standard. He added that he would support a privatization deal but, based on the specifics of the Albany County nursing home (in addition to the need for more dedicated care, the building needs numerous repairs), he doesn’t believe that the agreement with USG will actually save the county as much money as it reported.

“We have a triple net lease with USG,” said Rozak. She added that the firm would be responsible for the maintenance of the plant, but also that the county would have to make some capital improvements “up front” if the deal went through.

Steck would like to see a study done to weigh the financial impact of all of the options available to Albany County before the decision is finalized. “It’s a very dangerous proposition. If the private operator decides it’s not working, then money will have been wasted,” Steck said. “Why are we sending all this money out of the window?”

Rozak maintained that the county is running out of options. “As long as we own and operate the Albany County nursing home, we will never, ever, ever be able to achieve that 2 percent property tax cap.”