Nursing home plan clears state hurdle
October 22, 2009
BOSCAWEN — Last week, Carroll County's nursing home residents came one step closer to having a newly built facility to replace the aging Mountain View Nursing Home.
On Oct. 15, the state's Health Services Planning and Review Board voted 8-1 to grant conditional approval to the county commissioners to pursue plans to construct a new nursing home, which is estimated to cost $23.5 million. The meeting was held in the Merrimack County Nursing Home in Boscawen.
The governor-appointed review board is responsible for approving a document called a Certificate of Need, which the state requires licensed health care facility operators to attain before a new facility is built or major renovations are made to an existing building. The approval sets the stage for the Carroll County Legislative Delegation to authorize money for construction.
The review board granted the approval with conditions. Before breaking ground, the county commission must provide the board with the final financing arrangements and documentation of approval from the Legislative Delegation.
During the meeting, review board member Dr. Joseph Miller said he was impressed with the proposed plan. The building design, which is unique in the state, will provide residents with a home-like atmosphere. At the new home, groups of single (one person) bedrooms will be clustered around a living room and a kitchen. These clusters are called households. The building will have eight households.
"May I commend you on the beautiful plan," said Miller. "I'll consider moving to Carroll County if you save me one of those rooms."
Later in the meeting, Miller repeatedly called the proposed building a "palace."
Before the review board's vote, all three county commissioners and a Conway resident testified under oath that the new facility should be built.
Commission Chairman David Sorensen told the board the 40- year-old Mountain View Nursing Home has had a number of deficiencies over the years including asbestos, a lack of storage, a leaky roof, and perhaps mold. Living conditions are unpleasant because two people share a small bedroom and four residents must share a toilet, he said.
Next, Commissioner Dorothy Solomon explained Carroll County is an aging population and the need for a new facility will only grow. The county is trying to do better than just forcing the elderly into an uncomfortable institutional setting. In contrast, the proposed building would offer future nursing residents a sense of community, she said.
"Many residents are not suffering from dementia, they know where they are," said Solomon. "They want and deserve the dignity of a home."
Conway resident Don Litchko also testified. He said Mountain View's staff is wonderful but county desperately needs the proposed nursing home. At Mountain View residents have difficulty maneuvering around the building because the halls are overloaded and used for storage. The "recreation room," only has hardback chairs and a television, making it an unpleasant place to watch a ballgame, he said.
"(The current facility) is one of the biggest shames in Carroll County," said Litchko. "The facility itself is horrible."
Despite the testimony, review board member Scott M. Wojtkiewicz, who represents a private nursing home concern, objected to the proposal for cost reasons. However, Wojtkiewicz said he liked the design.
Wojtkiewicz projected new nursing home is projected to cost more than $4 million in the first year. Wojtkiewicz arrived at the figure by adding the nursing home's annual operations loss to a year's payment of debt service from construction.
He suggested having a private company run the new nursing home after it's built. "No other health care company out there, unless it was it had the taxpayers to fall back on, could absorb those losses year after year," said Wojtkiewicz. "If I were a commissioner I'd be hard pressed to go to the representatives and say this is what we want to do and this is what we're going to lose."
Commissioner Chip Albee shot back that the private sector hasn't shown any interest in taking over nursing home. Had the private sector executives been interested, they would have attended a meeting in July when lawmakers were deciding if the county should remain in the nursing home business.
"We tried to reach out with no success," said Albee.
However, Albee did say the commission would be willing to discuss privatizing the new facility if a company came forward with an offer.
Review board member Robert Chase responded to Wojtkiewciz by saying private companies may be able to run a nursing home for less money but the quality of care may be reduced.
Sorensen replied Mountain View's staff takes "excellent" care of their residents.
Chase also complimented the commissioners on the design, which he said responds both to market forces and new regulations on nursing homes.
"This is a great leap forward for Carroll County," said Chase.
But Miller said he was "shocked" that the Carroll County residents haven't been more concerned about the price tag. He wondered what the price difference would be between a "palace" and a run of the mill nursing home.
Albee said the commissioners didn't want to build a standard nursing home because the county will need a modern facility to meet its needs in the future. He compared the debate over the nursing home to a period about 70 years ago when Wolfeboro residents decided one-room schoolhouses were no longer adequate to educate children.
Commissioners assured Miller that Carroll County residents were largely supportive of the plan. Albee added in long term, the proposed facility would be a better deal than creating a cheaper facility costing about $15 million. The Legislative Delegation rejected the option of constructing a cheaper facility in July.
In 20 years, the cost of proposed facility would be about $61 million while the cost of the cheaper facility would be $60 million. By year 25, the gross cost of the proposed facility would be about $40,000 less expensive than the cheaper option. The major reason why the proposed option becomes less expensive over time is because it would have a better occupancy rate, which would increase the revenue stream, said Albee.
With the $15 million option, residents would have to share rooms and the occupancy rate would likely be 96 or 97 filled beds. However, with the proposed facility occupancy could increase to 100 filled beds, said Albee. Having residents share rooms drives down the occupancy rate because when a resident leaves he or she must be replaced by a person of the same sex.
The proposed building's increased revenue stream and efficiencies such as lower fuel costs may reduce the annual operating shortfalls by about a million, said Albee. The current nursing home cost about $2.5 million per year.
However, the county won't start saving money right away, according the review board's staff report. When factors such as construction debt service are included the taxpayers will have to pay an additional $1.48 million annually to run the new home. The average tax increase is estimated to be 16 cents per thousand of assessed property value, which is an increase to the tax rate about of 17 percent.
"Based on the level of support expressed for the proposed project it would appear that may residents of the county are willing to accept the tax increase in return for an efficient and safe nursing home," the report states. "However, it should be noted that any tax increase could burden the unemployed and those living on fixed incomes."
Commissioners are also hoping for donations to help offset the cost of building the new nursing home. A 501c3 charitable organization is being set up to receive such donations, said commissioners who expect the money to come from individual donors as opposed to corporations.
The proposed facility 85,000 square foot would be built near the Carroll County complex in Ossipee. Officials are expecting a guaranteed maximum price to be set in November. Once county officials have a guaranteed maximum price they can go out for bid on construction. The proposed nursing home would have 103 beds. The county cannot build more because of a state moratorium on the number nursing home beds that can be created.