County takes regional approach to curb nursing home costs

Richard Mial

Nov. 8, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- La Crosse County's Lakeview Health Center has become a pioneer in Wisconsin -- the first county nursing home attempting to become a regional facility.

And while details still are being worked out with the state, officials in other counties already are taking notice of what's being done at Lakeview to provide for special-needs residents.

Lakeview has a variety of different programs within its walls -- including a 142-bed nursing home, as well as programs for mentally ill and developmentally disabled residents -- and a sheltered workshop.

It accepts residents other nursing homes can't handle, said administrator Pam Semb.

"Most people start out at Lakeview because they have behavioral issues in other settings," Semb said.

But Lakeview also racks up annual losses of nearly $2 million, mostly because federal Medicaid funding doesn't come close to covering care costs for indigent residents, said Semb and County Administrator Steve O'Malley.

Other nursing homes make up for their Medicaid shortfall by charging private-pay residents more, O'Malley said. Hillview, the county's more traditional nursing home, has 35 percent of its residents on private pay. It is self-sufficient, needing no property tax funds.

But Lakeview -- whose residents can have autism, mental illness and developmental disabilities -- has no private-pay residents.

"It would burden the human services system if Lakeview didn't exist," Semb said, noting the county otherwise would have to send many residents to state-run mental health facilities in Madison or Oshkosh, at a cost of nearly $1,000 a day.

Representatives of Citizens for Responsible Government, a watchdog group in La Crosse, have in the past said Lakeview's deficit is unacceptable. They have advocated privatization as one possible solution. CRG member Jim Grenisen said most members of the group still feel that way.

"We've got to cut our losses," Grenisen said. "Lakeview has always been a loser. I just don't accept that they could not do something else."

The county board for years has looked for ways to reduce Lakeview's deficit, Chairman Steve Doyle said.

"We weighed out various alternatives, and each was worse than the other," he said. "Should we close Lakeview? Our Human Services Department ran some calculations and found that if we had to send our residents out of county, it would cost even more than it would at Lakeview.

"Privatize? That type of nursing home, with the clientele it serves, is not particularly marketable."

Then about four years ago, O'Malley "pulled a rabbit out of a hat," Doyle said, coming up with an idea for Lakeview that could save $750,000 a year.

He suggested banding together with other counties that had special-needs nursing home residents, and sharing the cost. The county at first considered forming a separate corporation to run Lakeview, with each county paying a surcharge to have patients there.

But the state Department of Health Services, after more than a year of silence, objected to the idea, O'Malley said.

"Then we went through all the hoops and created a commission to run Lakeview," O'Malley said.

The state did approve that approach, as did Attorney General J.B. Van Hollen in a recent opinion -- though Van Hollen wasn't sure about the fee assessment system being used.

The Mississippi Valley Health Services Commission includes La Crosse and 10 other counties -- including as far away as Marinette, on the Wisconsin-Michigan border.

It costs the counties $5,000 to join. Then all counties -- including La Crosse -- pay a daily charge of $39 a day for each resident, to help make up for the Medicaid deficit. La Crosse County has been collecting the fees from other counties while the details are worked out with the state. It has not yet used the money to reduce the deficit, but hopes to being in 2010.

At a recent commission meeting, the fee was increased from $39 to $45 for 2010. But it passed by a split vote, with Monroe and Juneau counties opposing the increase.

Meanwhile, La Crosse County needs to work out a deal with the state. O'Malley said he is confident the county will be able to negotiate a system the state can accept that meets La Crosse County's financial needs.

"The DHS already issued a license for us," he said. "They're going to want to work through it and make sure it happens."

Dodge and Clark counties already have expressed interest in taking a similar approach to La Crosse County in caring for their special-needs nursing home residents, said John Reinemann, legislative director for the Wisconsin Counties Association.

"La Crosse County is really the innovator," said Sarah Diedrick-Kasdorf, senior legislative assistant for the counties group. "Given the lack of state funding for so many human services we as counties provide, we can't operate business as usual."

Newstex ID: KRTB-0250-39530607