THE HUMAN COST OF NURSING HOME PRIVATIZATION

We recently learned that the Washington County owned and operated Health Center is destined to become the latest victim to privatization.  The overriding issue appears to be red ink on the balance sheet.  Federally mandated reimbursement rates are well below what it takes for Washington County to run the facility.  It has been reported that if no changes are made, the County Health Center will lose close to 3 million dollars in 2017. 

But before elected officials pull the plug on this venerable institution, one that has provided Washington County with various public services since 1830, all solutions should be explored.  Sometimes, a public enterprise operating at a loss is an acceptable result when weighed against the alternatives, including the human cost of privatization.

Privatization is defined as a public service taken over by a for profit business, with the primary goal of profit-not service.  When a “for profit” business begins operating a Health Center (or hospital, prison, fire department or toll road, as the case may be) the business cuts costs to increase profits and satisfy its investors. In return the public entity receives either a lump sum payment or a long term cost saving, relieving its taxpayers of an ongoing financial burden and management headache.

The most common actions undertaken by private concerns to increase profits following privatization include: eliminating unions, raising prices to consumers, cutting worker benefits, expanding working hours, and terminating long term employees who earn the most.  More troubling, in a nursing home setting, cutting services to residents might be a prime cost cutting feature.

As luck would have it our Washington County decision makers do not have to dive into privatization of the Health Center with a blind eye. The Keystone Research Center, a well established nonprofit organization out of Harrisburg, with the mission to: “broaden public discussion on strategies to achieve a more prosperous and equitable Pennsylvania economy” has already done much of the heavy lifting.

Several years ago this group researched and published an extensive report on the human cost of nursing home privatization in Western Pennsylvania. The subjects of the study were the Kane Regional Centers in Allegheny County, where privatization was proposed but never implemented; Comfort Home, which remained public but where the operation was taken over by a for-profit management company and Chelsea Manor, which was sold outright to an entity, created by the county for the purpose of buying the facility.  The report compares these homes with one another and with Green Gables, a private nursing home known for its low wages, high employee turnover and poorer quality of care, which at one point lead to suspension of admissions.

The widely circulated report is readily available in PDF format and provides some interesting findings, including the following:

·        Although (with increased funding pressure) staffing levels declined whether or not privatization was ultimately carried out, the most significant staffing cuts occurred where privatization was taken the furthest.

·        Workers’ wages and employee turnover, two factors affecting care continuity, were most negatively affected at the home where privatization proceeded furthest.

·        At both homes where some form of privatization was implemented, workers complained about shortages of medical and patient care supplies.

·        After privatization, Chelsea Manor began to develop a pattern of unexplained resident injuries, some of which were not properly investigated or reported.

·        All of the homes in the study, in varying degrees of urgency, needed more nurses’ aides. However, the Kane facilities in Allegheny County and public homes across Pennsylvania have much lower turnover among nurses’ aides than is typical for private homes.

While the report contains other findings and a great deal of background information not included above, the overall conclusion is clear.  The greater the level of privatization adopted by the county, the greater the problems attributable to staffing and level of care. 

Washington County has been better than most in preserving a public care facility.  It is one of only 16 Pennsylvania counties that continue to provide such a public service.  The rising costs of maintaining the Health Center are real.  But the human costs to long term employees and residents, following privatization, are also real.

One can only hope that the $260.00 an hour attorneys, hired to advise the county on privatization options, will consider these human costs along with the various financial models available.  There may well be an option that gives county taxpayers a break, without sacrificing our older and disabled citizens (and long term county employees) on the altar of privatization.  Simply saving the most money should clearly not be the goal.

Washington County residents with skin in this game need to get educated on privatization and make themselves heard at public meetings.  After all, these residents, their older and disabled loved ones and their family, friends and neighbors who work at the Health Center, all pay taxes as well.