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Nursing homes say they struggle under state budget plans

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ST. PAUL – Jon Riewer said his organization faces funding shortages, losing employees and struggling to provide care to the elderly and disabled.

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“At this point I would classify our situation as fairly desperate,” said Riewer, CEO and president of Moorhead, Minn.-based Eventide Senior Living Communities.

Riewer said Eventide is not alone among nursing home and other care facilities and state lawmakers’ budget proposals for health and human services do not help them with the dilemma.

“It’s hard not to feel like one of the most important things we can do as a state is protect our seniors, but we very much feel like we’re at the bottom of the food chain,” Riewer said.

Democratic legislative leaders set a budget target that cuts about $150 million from the two-year, $11 billion health and human services budget.

House HHS finance committee Chairman Tom Huntley, DFL-Duluth, said he tried to find a way to increase pay for caregivers despite cuts he was ordered to make.

“I’m very concerned about the rapid turnover,” Huntley said, noting pay is a significant factor for long-term care employees. “We’ve been cutting way too long.”

His plan would give nursing home employees a one-time 3 percent raise and other long-term care employees a 2 percent raise. The Senate version includes an overall 2 percent raise.

“From my perspective, it’s too little too late,” Riewer said.

Advocate groups propose a 5 percent increase each year of the two-year budget.

“We have such a huge gap to make up,” said Gayle Kvenvold, Aging Services of Minnesota president and CEO.

Huntley said that is too much money given the budget targets.

“To me and many of my rural Republican colleagues, this is unacceptable and we are going to try our best to right this wrong,” Sen. Gary Dahms, R-Redwood Falls, said.

He said he would support the 5 percent increases.

Huntley said he understands the concern that qualified employees are not staying at care facilities.

“Basically they can walk down the street to Walmart and make about the same wages and do probably an easier job,” he said.

The pay issue coupled with cuts and other factors are putting nursing homes at risk, said Patti Cullen, Care Providers of Minnesota president and CEO. She said facilities throughout the state are struggling.

“Really, as you look across the state, the risk of closure and job loss is pretty evenly distributed,” Kvenvold said out of about 380 nursing homes in the state, an estimated 115 are in financial crisis, putting about 15,000 jobs at risk. Northwest Minnesota has the most struggling facilities, she said.

“Facilities caring for our elderly and developmentally disabled are among our top employers and many won’t be able to stay open if these cuts are approved,” Dahms said.

Revenue options are limited for nursing homes because state officials must approve nursing home rates.

Sen. Tony Lourey, DFL-Kerrick, has proposed making nursing home residents pay a surcharge, which could raise about $16 million in the next two years. Kerrick has a plan to funnel funds back to the organizations.

Cullen said she is in favor of extra program funding, but all facilities might not benefit equally from that charge.

“If all the surcharge money doesn’t come back to boost our programs then it doesn’t really become a surcharge, it becomes a tax,” she said.

Health and human services spending is second only to public school funds in the state’s about $38 billion budget.

The area has seen cuts in the past, Kvenvold said, so she was surprised it came up again.

“It’s always hard to cut spending,” Senate Majority Leader Tom Bakk, DFL-Cook, said. “It’s an area of the budget that under current law is simply growing unsustainably.”

Kvenvold said the state needs to invest in senior services and care.

“Minnesota is aging,” she said. “We need to address the demographics and we need to do it in this coming biennium. We need to be ready.”

“There’s no way to stop the increase in HHS costs because of the age wave,” Sen. Kent Eken, DFL-Twin Valley, said.

Huntley said he hopes the budget still could increase, possibly in a conference committee where the differences between Senate and House versions would be ironed out. The governor’s budget proposal included an increase, and Huntley and Eken said that could influence discussions.

Eken said to make that happen, other areas of the budget might have to be trimmed, there might be new revenue or some combination. He said it will be difficult, but is possible.

“That’s where there is some hope,” he said.

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