Maryland County struggles with nursing home debt

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Michael A. Sawyers
Cumberland Times-News

CUMBERLAND “” Allegany County’s commissioners today said they will look for ways to deal with what is being described as a dismal financial situation at its nursing and rehabilitation center, a 153-bed facility where the expenses are 20 percent greater than revenues.

The grim picture was painted for the commissioners at their morning public work session by Jerry Frantz, director of finance.

“Something will have to be done,” Frantz said, pointing to what he called “meaty losses” in recent fiscal years such as $1,082,598 in 2005 and $747,657 in 2007.

Al Konrad, director of the center on Furnace Street, told the commissioners that every cost that could be cut has been cut. “The problem is not because of our operations,” Konrad said, praising his 120 full-time and 40 part-time employees.

Konrad said the financial pitchfork sticking into his budget has three prongs, one being fixed annual costs such as $450,000 paid into a retirement fund and $250,000 for post-retirement health care for former employees.

In addition, a change by the federal government in the calculation of revenue and the fact that some families are not paying for the care, has brought about the current problem.

“People used to pay their bills,” Konrad said, adding that in recent years some families have hidden assets in order to keep them. He said that 10 cases of nonpayment have been turned over to an attorney for collection.

Allegany County’s nursing home is one of only three in the state still owned and operated by a county government. The other two are in Frederick and Harford counties, Konrad said.

Most other counties have privatized their nursing home operations, most often retaining ownership of the buildings, but leasing the operations.

“No tax money has been used yet to support the home,” County Administrator Vance Ishler said. Ishler likened the situation at the center to a private home where the amount owed on credit card debt is greater than the amount of the assets possessed by the family. “Basically, you are talking about a bankruptcy,” he said.

Frantz said options include the use of general fund money to pay for the center’s losses or divestiture by way of privatization.

“In Pennsylvania, many of the counties have formed a nonprofit organization for their homes, which takes it away from the county’s operating budget,” Frantz said.

Commission President James Stakem said he has always been in favor of having the nursing home as long as it doesn’t cost the county money.

Frantz said there has always been an expectation that the home would break even or make a small profit.

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