Treasurer: Manor headed for deluge of red ink

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June 20, 2012

Treasurer: Manor headed for deluge of red ink

By JOE MAHONEY Staff Writer The Daily Star Wed Jun 20, 2012, 03:30 AM EDT

COOPERSTOWN -- Unless changes are made in the way Otsego Manor operates, the county's subsidy to the 174-bed nursing home will increase dramatically over the next few years, Otsego County Treasurer Dan Crowell said Tuesday.

The county-owned Manor has had a deficit averaging $2.5 million per year from 2007 through 2011, Crowell said.

Based on projected increases in the county's obligation to cover pensions, health-care benefits and salaries for workers, as well as other factors, the Manor will end up costing the county $4 million to $6 million a year by 2016, Crowell told members of the Board of Representatives' Manor Committee.

"It's become increasingly clear that if we are to maintain the high quality care that the facility offers, it would necessitate a 30 percent to 40 percent increase in the property tax bill," Crowell told The Daily Star. "There are a lot of people out there -- and I'm one of them -- who think the quality of care there is very high. But no matter how passionate you are about the quality of the services, it would be hard, politically, to pass a property tax increase" of that magnitude.

Crowell said the Manor is expected to experience a drop in revenue, with Medicare payments shrinking by a projected $350,000.

He said the total projected deficit by 2016 ranges from $4 million to $6 million because the calculations used variables for labor costs and the inflation rate.

Crowell noted that the labor contract between the county and the union for Manor staffers, the Civil Service Employee Association, is being negotiated.

The county's pension obligations for Manor employees, the treasurer said, is expected to rise by about $300,000 by 2013. Projected health insurance increases account for an estimated $200,000 in the expected rising deficit.

Manor Administrator Edmond Marchi said he and his management team are doing everything they can to make the facility run as efficiently as possible and to maximize sources of revenue.

"We benchmark ourselves to what other people (in the health-care industry) do, and we compare very favorably," Marchi said.

He noted that it will be up to the Board of Representatives to decide "what makes sense for the county."

"No matter what happens, our residents will always be safe and have a place, and we will always pay attention to their best interests," Marchi said. "There should never be a concern that we will throw people out in the streets."

Crowell said there is now "urgency" for county officials to begin considering options that lie between the two extreme ends of the spectrum of possibilities for the Manor's future: maintaining the current way of running it or selling it to a private operator.

"Because there is no perfect solution, we need to find the best possible solution available to us," he said.

Marchi said the Manor's current occupancy rate has returned to 98 percent after dipping to 96 percent last month. He said Manor administrators have been working with Bassett Medical Center to make sure patients being discharged from the hospital in Cooperstown are being informed of the availability of the Manor's services.

Bassett's discharge planners are also now being updated daily with information on available beds at the Manor, he said.