Last week, a third of the Massachusetts state Senate converged on the North Shore as part of its “Commonwealth Conversations” listening tour. The legislators visited various locations where they welcomed discussion on challenges and opportunities. As the proud leader of a group of skilled nursing facilities that serve hundreds of seniors in our communities, I’d like to share with readers of The Salem News an issue facing a segment of the North Shore economy that I brought forth to the senators.
For the last 55 years, our company, Bane Care Management, has provided skilled nursing care to the residents of the North Shore, including our locations in Salem, Peabody, Lynn and Marblehead. Each day we care for nearly 400 frail elders, most of whom cannot be cared for safely in their homes. Our residents are extremely frail, have complicated and complex medical conditions, and their family situations do not allow them to remain at home. We are the best and, in fact, only high-quality option for them.
Most of this care is paid for by Medicaid, yet this crucial state program does not even cover the full cost of care. In fact, there is a $37-per-bed-per-day gap between the cost of providing quality care and state reimbursement. That uncompensated care for this core state service amounts to a loss of $13,000 per year for every Medicaid resident in our nursing homes. Massachusetts — considered by many the bellwether for health care quality and innovation — is the fourth worst state for underfunding nursing homes.
The only reason we can continue to operate is that other payers subsidize this Medicaid loss. Sadly that “other payer subsidy” has eroded because of cuts across the board due to the federal Affordable Care Act and other insurers cutting providers costs, and many nursing homes are approaching the brink of no longer being able to provide this care. Our frail elders will have fewer and fewer places to go to receive quality care in their community.
In addition, there is another, equally pressing matter, and that is our staff. Since more than 70 percent of a nursing home budget is used to fund employee wages and benefits, a facility’s ability to invest in staff and patient care is dependent upon government funding. Our company alone employs 550 staff members on the North Shore, the vast majority of which are the stable middle class. They are nurses, nurse’s aides, therapists, cooks, housekeepers, activities coordinators, billers and maintenance staff. They are solid, compassionate people who come to work every day to care for elders in need. They are the heart and soul of the neighborhoods of the North Shore.
Unfortunately, because of the last several years of no increases in Medicaid nursing home rates, we have been unable to provide even simple cost of living increases in salaries and wages for our dedicated staff. The razor-thin margin we used to have has rapidly disappeared. Now, this chronic underfunding has caused a serious depression in wages for our staff, and there is a ripple effect to the North Shore economy. On the North Shore alone, there are nearly 10,000 citizens who work in nursing homes, and their ability to support and grow the North Shore economy has been impeded.
The silver lining is that last year, due to the leadership of the Legislature, the first step of a nursing home stabilization bill was passed. It was a tiny first step, but a first step nonetheless, and resulted in the first increase in Medicaid rates in seven years. That is not a typo: Seven years with no increases. Unfortunately, some of the impact of this important first step in the current budget year was blunted by an emergency “9C” budget cut in December.
Our profession remains hopeful that the Legislature will continue this stabilization effort by supporting legislation that has been filed by Sen. Harriette Chandler, D-Worcester, and Rep. Tom Golden, D-Lowell. We appreciate the North Shore delegation’s support as well. Without significant state investment, nursing facilities across the commonwealth will not be able to invest in staff or patient care, potentially leading to additional facility closures and access problems for our most vulnerable residents.
Richard Bane is president of Woburn-based Bane Care Management and a board member of the Massachusetts Senior Care Association.