Florida has suffered deeply from the effects of the Great Recession and its aftermath, with once booming housing and construction markets gone bust and even the 12-month-a-year tourism trade unable to prop up an otherwise weak economy that has left nearly 1 million without work.
In a state known for its older-skewing populace, along with Disney World, space launches, and the beach, the economy has left another mark on Florida. The Sunshine State is now thought of as a leading foreclosure market in a country full of depressing stories about lost real estate dreams.
The gloomy economic scene has put intense pressure on state lawmakers to find ways to eliminate huge budget deficits. Fiscal year (FY) 2011-2012 saw the need to bridge a $4.6 billion deficit, and FY 2012-2013 could see a $2 billion hole. As Provider went to press, Florida Gov. Rick Scott (R) was preparing to release his 2012-2013 budget recommendations, which long term care providers anticipate will include another round of Medicaid reimbursement reductions.
Medicaid costs rose to $20.3 billion projected for this fiscal year in Florida, from about $19.8 billion in 2011, with the state’s share surging 23 percent, to $9.48 billion, from $7.7 billion, Florida legislature reports said. The state’s share of Medicaid is forecast to rise 2.7 percent, to $9.74 billion, in 2013, and total costs may rise 15 percent by 2015.
Florida’s legislature last year also passed a proposal to shift almost all Medicaid beneficiaries into managed care plans to reduce costs, but the state has not received a waiver from the federal government to start the process of making the change.
Overall, the short-term picture is clear in Florida: Medicaid reimbursement dollars will decline while beneficiary rolls rise and the economy lags behind in keeping up with rising costs.
Medicaid Under The Spotlight
Gov. Scott specifically pointed to the growing costs of the Medicaid program as a main drag on the rosier state income picture for 2011.
The governor told the media in late November that when he releases his proposed budget, it will have recommendations to deal with rising Medicaid costs. Beyond immediate measures to help balance the budget, Scott would like the federal government to let states run the Medicaid program, a popular notion among many in his party who call for “block granting” Medicaid dollars as opposed to managing the federal-state partnership that currently exists.
Talk of what could be in the offing for next year has J. Emmett Reed, executive director of the Florida Health Care Association (FHCA), working hard to limit what will certainly be another reduction in reimbursement dollars for long term care providers.
“It was bad last year, but then you’re dealing with a $4.6 billion budget hole. We weren’t happy but it could have been worse, and it was worse for other providers,” Reed says.
Things didn’t look so bleak for FY 2012 about six months ago, he says, but things took a turn for the worse by end of summer, and now the negative reports project the aforementioned $2 billion budget hole.
At the same time the state has hit health care providers hard in the Medicaid program, the federal government has reduced Medicare reimbursement for nursing care providers, a virtual tsunami of cuts, as Reed puts it.
“Seventy percent of our costs are our people [staff], and the residual effects go to the vendor level,” he says.
A lot of FHCA members are assessing their bottom lines anew with the reimbursement uncertainty now a seemingly constant reality, with some likely in line to reduce staffing while many more try to figure out ways to avoid such steps, Reed says.
“We have a lot of members who are not cutting. They are working with frontline caregivers to manage hours,” he says. “Caregivers working at facilities have knowledge of the residents, they work with residents.”
Reed notes that all the work being done to creatively work around the 2011-2012 reductions could be a mere footnote to what lies ahead. “If there is another round of cuts, all bets are off,” Reed says. “But providers are bending over backwards to make it work and keep caregivers there to serve residents.”
Greek For Caring
Against this backdrop of mostly negative economic news, nursing and assisted living facilities conduct the day-in day-out work of caring for the state’s frail and elderly, a job Marilyn Wood, president and chief executive officer (CEO) of Opis Management Resources, Tampa, Fla., has embraced for 40 years. She worked first as a nurse and rose through the ranks to lead Opis, a word that comes from the Greek language and translates to “caring.”
Opis was founded in 2003, assuming control of properties owned by Kennett Square, Pa.-based Genesis HealthCare, which departed the state because of concerns about the business climate. Florida is not an easy state to do business in, with its high litigation costs tied to a friendly environment for trial lawyers.
Opis runs 10 skilled nursing and one assisted living facility across the state and prides itself on strict attention to quality, having won top honors from the state of Florida four times for its efforts to make a positive difference in elder care.
Wood sees long term care as a business prone to defined cycles, with the current one being as challenging as any one that has presented itself in the past. She has also seen how the acuity level of residents has shifted, transforming the work to a higher level of care at all settings.
Florida A Tough Market
As providers across the country face the challenges of reimbursement reductions and marketing their services in a down economy, Wood says Florida remains a unique case with its plentiful number of seniors and other factors.
“The litigation we have in our state is still a problem for us,” she notes. Also a challenge is the fact that Florida is a pacesetter in regulation. “I think this comes because of the scrutiny generated by the large population of seniors in our state,” Wood says.
The Medicaid issue is, of course, a leading challenge as well, but one she grasps. “The reality is the government has only so many resources; there are pressures to fund education and transportation beyond health care, for example,” Wood says.
All sectors have had to sacrifice, but the goal for long term care is to do so without compromising quality care. The jobs inside her facilities are all tied to making residents safe and as healthy as possible, so each is valuable to the overall operation.
Opis employs 2,300 people, and these workers are part of a family as well, putting food on their own tables and paying mortgages. “That’s what people have to understand. We take our staffing issues seriously and care for them passionately. Legislators need to understand that,” Wood says.
CCRC Attracts Residents Despite Economy
Tom Kelly, CEO of Village On The Isle in Venice, Fla., thinks his operation is getting it right in how to care for every long term care need within his continuing care retirement community (CCRC) just a few minutes from the Gulf of Mexico. Located south of Sarasota, the CCRC offers seniors skilled nursing, assisted living, and independent living options in a high-tech community wired with the latest technology to improve care quality and make living as comfortable as possible for residents.
A not-for-profit, faith-based provider, Village On The Isle is affiliated with the Evangelical Lutheran Church in America and strives to meets its commitments beyond the daily care of residents in a 100 percent ecumenical fashion, Kelly says. This effort includes catering a Meals on Wheels program to the local community, serving 180 meals per day all week.
“All of it is done out of our own pocket with volunteers,” Kelly says.
With a staff of 275 serving the 415 seniors in the CCRC, the breakdown of the living options are 210 residential apartment homes, 100 assisted living accommodations, and a 60-bed skilled nursing facility. Again, as part of the faith-based effort, 10 percent of the 100 assisted living spots are reserved for a special program for those who cannot afford to pay full freight. The maximum cost is $1,500 a month for the affordable care program, compared with the regular rate of $3,695, he says.
“There are no Medicaid waiver dollars involved,” Kelly says.
Technology Vital To The Mission
Village On The Isle takes technology seriously. The entire complex is wired for Wi-Fi, which is free for residents and guests as well as mobile Skype videophones that residents can use to video chat with their families and loved ones. Dining areas are equipped with digital signage for easy representation of daily menus, and health care facilities employ Electronic Medication Observation Systems to reduce medication errors.
Other tools include the Nurse Rosie system, which provides state-of-the-art equipment for gathering vital signs such as pulse oximetry, blood pressure, temperature, and blood glucose levels. The system interfaces with CareTracker to eliminate human error in the recording and transcription of vital signs.
Kelly praises the CCRC’s staff for devising new ways to make technology more than just software and hardware, but part of the resident’s experience and part of the staff’s care plan. The move to keep abreast of the latest tools for pleasing residents and their families is a strategy to maintain quality care and attract business even in the rough economy.
Jobs, Jobs, Jobs
Over the years, Kelly has built up a strong business that had a 20 percent vacancy rate when he took over. Now, the facilities have added and saved jobs with an attention to detail and made staff more capable with the use of technology.
With the high occupancy rate near 100 percent, Village On The Isle is a job beacon for the Venice community. “We have very high staff retention, and that is good because long-term employees are your best assets. This translates to consistent quality care, no lawsuits, and few worker comp issues,” Kelly says.
Kelly’s staff have 80 percent of their health insurance paid for, and there is a 20 percent employer match in a retirement plan with no vesting.
Village On The Isle also works with the local high school to attract young workers who often make the care community their first job.
“It’s $8.75 to start, and they can eat whatever they want,” Kelly says.
Some of the younger workers stay on for years to come, he says, noting his director of food services came out of the high school recruitment effort.
When the state Medicaid reimbursement reductions took effect July 1, 2011, and were followed in October by the federal cutbacks of more than 11 percent in Medicare payments, assessments had to take place on how to deal with the loss of funding, Kelly says.
“We expected the problem to occur, and we built operational budgets accordingly,” he says. This preparation resulted in no wage cuts or a job freeze for employees, even though the final Medicare percent rollback was on the high end of expectations coming in one fell swoop.
To combat the effect of the governmental reductions, Village On The Isle has sought to bolster its outpatient business, diversifying its services by providing potential clients with the latest low-gravity treadmill system for rehabilitation purposes.
By getting away in some respects from the unpredictable nature of Medicaid and Medicare reimbursement, the system of overall care across the CCRC can flourish, starting with the core mission of serving others, both the ones paying for care and the entire community surrounding the site.