Inferior Care Feared As Counties Privatize Nursing Homes

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Arlene Meyer is a busy woman.

The 86-year-old starts each morning by watching the news in her room at Pine Crest Nursing Home in Merrill, Wisconsin. Then it’s off to the dining hall for breakfast so she can “BS with everybody out there.” She never skips her daily walk and devours books delivered by the public library each week — anything except romance or science fiction.

The event calendar in Meyer’s room lists a smorgasbord of other options: manicures and mimosas, chair Zumba, trivia, Packers watch parties and beer pong. Meyer spent a recent Friday at an exercise class in an area of Pine Crest that later hosted a happy hour with live music.

“The concept of old people, it’s out,” Meyer said, adding that “the days go by so fast” — an observation that surprises outsiders with duller expectations for nursing home life.

Meyer moved to Pine Crest in 2023 to recover from pneumonia. She liked it so much she stayed permanently. The nursing home’s social media posts show her holding a lizard, relaxing during a spa treatment and singing a Willie Nelson song at karaoke — photos that brought joy to those who know her.

“Sassy Arlene! Love it!” one person commented on a photo. “Happy you haven’t changed Arlene,” wrote another.

Lincoln County owns Pine Crest, one of 36 county-owned nursing homes in Wisconsin. They tend to be better staffed, have higher quality of care and draw fewer complaints than facilities owned by for-profits and nonprofits, a WPR/Wisconsin Watch analysis of U.S. Centers for Medicare and Medicaid Services data shows.

Wisconsin has more county-owned nursing homes than any state but Indiana. But perhaps not for long.

Over more than three decades, residents in 22 Wisconsin counties lost public nursing homes to sales or closures. This year alone at least five counties — including Lincoln — considered selling, started the sales process or sold.

County leaders say they have only two options while facing financial pressures and staffing shortages: sell or close the homes. Local organizers disagree, arguing counties should continue providing high-quality care for low-income older people and disabled adults.

Lincoln County’s board voted to sell Pine Crest to a for-profit at the start of this year. After that buyer backed out, the board is planning to find a new one.

Meyer worries about potential disruptions at Pine Crest.

“I love it here,” she said. “I sincerely do.”

A flurry of nursing home sales and closures

Meyer, a former Lincoln County Board supervisor, doesn’t own a phone, but she stays up to date on local happenings. It didn’t take long before she heard rumblings about selling Pine Crest.

“I was teed off about it because of some of these SOBs,” Meyer said. “They said, ‘well, the cost factor.’ Now I think about what jerks were running this.”

Running a nursing home is expensive, and counties aren’t required to do so — something officials often realize during recessions and inflationary periods.

The financial crisis of 2007 and 2008 was Wisconsin’s busiest stretch for nursing home sales, with four counties selling.

Since inflation started surging in 2021, at least five counties outside of Lincoln have sold or considered selling:

• Iowa County closed its nursing home in 2022 after failing to find a buyer.
• A private nursing home chain took over Washington County’s nursing home in July.
• The St. Croix County Board considered selling before voting against it.
• Sauk County’s board this year approved a sale to a for-profit that still requires state health department approval.
• Portage County heard interest from one prospective buyer but chose not to sell following public pushback. It will decide later this month whether to look for a different buyer.

Meanwhile, dozens of for-profit nursing homes have closed in recent years.

Lincoln County started debating Pine Crest’s future in 2022 while the board sought budget cuts. Then-board chair Don Friske noticed Pine Crest had for years run substantial annual deficits.

That’s been the case since the 1980s for county-run nursing homes nationwide, said Anne Zahradnik, an associate professor of health administration at Marist College.

Those remaining “are a holdover from an orientation toward government solving problems,” she added.

From ‘poor farms’ to nursing homes

Wisconsin’s county governments have a long history of housing vulnerable populations.

Many ran “poor farms” or “poor houses” for residents experiencing poverty starting in the 1800s. Most states eventually created centralized nursing homes to serve older people and those with disabilities from across the state, while Wisconsin prioritized keeping people close to home. A Wisconsin network of local nursing homes and converted poor farms started receiving federal Medicaid funding in 1974, according to a Legislative Audit Bureau report.

Nursing homes for decades were the only long-term care option for populations they served, and people who relied on government assistance had few choices outside of county homes.

That is changing as people increasingly age at home or in assisted living facilities that offer more independence at a lower cost. Wisconsin’s assisted living options hold more than double the beds of its nursing homes.

But assisted living, unlike nursing homes, can’t care for people who need regular medical attention. Nor do they offer the same protections against evictions for residents who rely on Medicaid, the joint state and federal aid program to help low-income residents afford care.

More than a quarter of nursing home beds, on average, at for-profit and county-owned nursing homes sit empty, according to federal Medicaid data.

Almost 40 of Pine Crest’s 120 beds are vacant, but Wisconsin can’t afford to lose them.

Without nursing homes, hospitals struggle to find housing for their sickest patients, Zahradnik said. The Wisconsin Counties Association projects a need for roughly 10,000 new skilled nursing beds by 2035 as state demographics trend older.

To keep Pine Crest running, Lincoln County’s board debated converting part of it into assisted living or even knocking it down to build a smaller nursing home with lower operation costs. Both options would require up-front money the county lacks, Friske said.

The only remaining option the board sees: selling.

Counties struggle to keep up

Medicaid policy is complicated and frequently changes. The program is also how most nursing home residents pay for care.

Lincoln County’s board lacks expertise on nursing home management, making it hard to keep up, Friske said, echoing officials in other counties.

“We’re horrible at it,” he said.

As the board discussed exiting the nursing home business, it learned the county was short more than $1 million in expected revenue to cover one year’s costs.

The state has traditionally subsidized county-owned nursing homes, and it started increasing Medicaid reimbursements in 2022. The change shrunk ongoing county deficits to provide care, wrote Elizabeth Goodsitt, a spokesperson for the Wisconsin Department of Health Services, which distributes the nursing home supplements.

That was positive. But shrinking those deficits meant counties would get smaller lump sum subsidies for operating nursing homes – something officials in multiple county governments didn’t anticipate, leading to budget shortfalls.

“Just when you think you’re one step ahead, you’re two steps back,” Washington County Executive Josh Schoemann said.

He described the unexpected loss of the subsidies as “just another brick in the wall” for a nursing home the county ultimately sold to a for-profit this year.

Lincoln County used federal pandemic funds to cover the unexpected subsidy loss — a short-lived option.

Despite supporting county-owned nursing homes, state officials don’t always effectively communicate with counties, said Rene Eastman, vice president of financial and regulatory services at LeadingAge Wisconsin, an advocacy group for older adults.

Still, Eastman said, the recent Medicaid rate reimbursement hikes could ease financial pressures over time.

“If counties hung on for a little bit longer, they would really see the effects of that funding infusion, and they would see the increased need in their communities,” she said.

St. Croix County commits to nursing home

St. Croix County Board Vice Chair Bob Feidler said his colleagues didn’t seriously consider selling its nursing home. But a discussion about that possibility prompted opponents to flood an August board meeting.

The board voted against selling, deciding that nursing home revenue would likely grow, aided by higher Medicaid rates and a federal grant to open a dementia wing.

“All of a sudden, we went from what had been a negative revenue to barely a positive revenue, to a more solid projection,” Feidler said.

Many Lincoln County residents hope their board will reach the same conclusion. But increased Medicaid rates alone won’t cover needed costs outside of care, like renovating Pine Crest’s  building, Friske said. That would likely require a property tax increase.

“You can’t just go on a whim, ‘Hey, yeah, we’re going to throw this extra money on the property tax,’ ” Friske said. “People are struggling.”

County leaders have historically asked voters to support nursing homes through ballot measures.

Voters in Green County, for instance, approved an April ballot measure to continue funding their nursing home.

Portage County voters approved one referendum in 2018 and a $20 million referendum four years later for the construction of a new nursing home — renovations that still haven’t started. Rising construction costs since the delay mean millions more are needed to fund the project, according to county board members who have blocked calls for a fresh referendum.

In Lincoln County, more than 80% of respondents to a 2023 Merrill Foto News and Tomahawk Leader online survey opposed selling Pine Crest.

But the board blocked two efforts to put Pine Crest’s future on the ballot.

How private homes profit: Cutting staff, benefits

Friske had gotten unsolicited calls from brokers even before putting Pine Crest on the market, as have officials in other counties.

Why buy a money-losing nursing home?

For-profits can’t simply build new facilities. The state determines the need for nursing home beds in different communities — requiring newcomers to typically buy a license from an entity already operating a facility.

Deficits under government ownership don’t mean private companies can’t turn a profit.

They might find savings by rejecting applicants with behavioral issues who require costlier care. Counties that own a nursing home typically send higher-needs residents there. Counties that don’t own a nursing home still pay to send such residents to another facility that will accept them.

Private owners frequently reduce staffing and benefits upon purchasing county-owned facilities, Eastman said. Lower staffing correlates with poorer care.

The Centers for Medicare and Medicaid Services rates nursing home staff on a 1 to 5 scale, considering time they spent with residents and turnover.

The median staff rating at Wisconsin’s county-owned nursing homes is 5, the highest possible, according to WPR and Wisconsin Watch’s analysis. That’s compared with a median rating of 3 at for-profit facilities in the state.

A sign outside of the Portage County Health Care Center touts its 5-star rating. Grace Skibicki, a resident of 13 years and a former care center nurse, recognizes that as impressive.

She expects care to decline if a chain with a lower rating purchases it. She wouldn’t plan to stick around.

“It’s really scary because you don’t know what’s going to happen to you,” Skibicki said.

Staff are also waiting to see what their future holds.

Nursing home work can be grueling with modest pay, accounting for significant staff turnover across the industry. But county-owned nursing homes employ public workers who earn county benefits and access to one of the country’s best-funded retirement systems. That may explain why median turnover trends at Wisconsin’s county-owned homes (41%) are lower than they are at for-profits (51%), WPR and Wisconsin Watch found.

Wisconsin’s for-profit nursing homes drew a median of three substantiated complaints over the last three years, compared to a median of zero at county-owned facilities, which also fared better than for-profits and nonprofits in health inspection and overall quality ratings.

Nursing homes owned by Lincoln, Portage and Sauk counties all rate above average, but county officials believe private owners could run them better.

Counties struggle to make quick decisions the fast-changing industry requires, Friske said.

Potential buyers named in Lincoln, Portage and Sauk counties all own multiple facilities across the state. Two own facilities in other states. That setup makes it easier for them to fund repairs or convert rooms to assisted living quickly without repeatedly asking taxpayers.

Care & Rehab Company, which initially sought to buy Pine Crest, owns six facilities in Wisconsin and Minnesota. Two share Pine Crest’s “much above average” federal rating, but two others received “below average” ratings.

People for Pine Crest

Dora Gorski kept her husband Ken at home for as long as possible.

Ken, a father, veteran, martial arts instructor and first responder, was often too proud to admit to falling — even when Dora woke up to find him on the ground.

She initially got help from neighbors and home health aides who warned her about his worsening dementia. Ken eventually ended up hospitalized and in need of a wheelchair.

When Dora realized she’d have no way to get him into their house upon their return, Pine Crest was her first call.

The woman in admissions knew Ken, who had taught her children aikido. Once he moved in, a maintenance worker recognized Ken as his former martial arts teacher. A caretaker told Dora she knew Ken, too — having worked with him as a phlebotomist.

It turned out that Arlene Meyer, a fellow first responder who had long known Ken, lived down the hall.

“It was people who not just knew him as a doddering old man who is barely able to talk,” Dora said. “They knew him as a respected instructor.”

Two weeks before Ken’s death in December 2023, Pine Crest hosted his 90th birthday party. His children, former students and friends, including Meyer, packed a community room.

“That meant a lot to Ken,” said Dora, who still participates in a group called “People For Pine Crest,” which opposes a sale.

“We own it. It’s our place. We all take pride in it being here,” she said.

The group spent 2023 urging the Lincoln County Board to keep the nursing home. Their flurry of petitions, yard signs, T-shirts, public testimonies, phone calls and emails didn’t work. The board voted to sell to Care & Rehab.

But an attorney and ally on the county board noticed a language problem in the sale agreement and sued the county to halt the sale.

Care & Rehab backed out before the case could move forward, offering People For Pine Crest a reprieve.

But Friske, who lost reelection this spring, sees a ticking clock. He expects Pine Crest will face a fiscal crisis that will force a closure unless it sells.

He resents any suggestion that his board colleagues don’t care about those who depend on Pine Crest.

“The county board is not a congressman from Missouri, Arkansas and Texas, telling Wisconsin how to live,” Friske said. “What’s happening here is friends and neighbors who are elected to the county board. They live here, their families are here, we’re all here.”

Lincoln County has just two other nursing homes, both in Tomahawk and with lower federal ratings.

Dora Gorski, who lives 20 minutes from Pine Crest, said the short distance allowed her to eat breakfast with Ken most mornings. That routine would have been tough to maintain — doubling the length of her drive — had he lived in one of Lincoln County’s two private facilities or the state veterans home in King, Wisconsin.

The county hopes to keep some nursing home beds in Merrill, said current Lincoln County chair Jesse Boyd, but they won’t be county-owned. He agrees with Friske’s financial outlook.

“Right now, we’re drowning,” he said.

The county now has lined up a couple of potential buyers for Pine Crest.

If a sale proceeds? Pine Crest won’t be the same, Gorski expects. For now it’s “full of neighbors and friends and people from our community, people who love us and know us,” she said.

“You don’t find that in some big city, and you don’t find that in a private, for-profit nursing home.”