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Lakeland Board recommends new facility

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By Pete Janecky

Lake Geneva Regional News

The Lakeland Health Care Center Board of Directors has voted to recommend that a new 200-bed facility be built.

Supervisor Robert Arnold, chairman of the Lakeland board, reported at Tuesday night's County Board meeting that the vote on the new facility was 3-2.

Arnold said Supervisor Joseph Schaefer voted against the recommendation because he wants a facility with less beds.

Arnold said he voted against the recommendation because the option of the public sector taking over had not been fully explored.

County Administrator David Bretl said the Finance Committee will discuss at its April 24 meeting options for facilities with 125, 150 and 175 beds.

A financial analyst told the County Board Tuesday that building a new facility is the most cost-effective way to confront the future of Lakeland Health Care Center.

Mark A. Knuth of Schenck and Associates, a Fox Valley accounting firm, presented a summary of a recently completed financial analysis that cost the county $20,000.

The options of maintaining the status quo, remodeling the current facility or closing the facility all have greater financial downsides than building a new facility, Knuth explained.

A 200-bed facility would scale back the county's operation from its current average census of 223 beds occupied.

A reduction to a 200-bed facility would be a conservative step that would be in line with national trends, Knuth said.

Censuses have declined at both government and private nursing homes, and there also has been a decrease in the number of nursing homes, he said.

Walworth County is not alone in its concern about financing care for the elderly, Knuth said. Nationwide, 60 percent of nursing homes are in financial stress, he said.

The financial analysis was prompted by the expected demise of the federal system that helps to fund nursing homes.

The system is called the intergovernmental transfer program. It is a complicated web of money transfers between federal, state and county governments that brings millions of dollars to the county each year to subsidize operations at Lakeland.

The financial analysis assumes the loss of the intergovernmental transfer program in 2005.

However, Knuth said Tuesday the latest news on the program is that some funds may continue, and he estimated it could return between $1.5 million and $1.7 million to the county in the years when the financial analysis had project the total loss of intergovernmental transfer funds.

Here is a breakdown of the five-year financial projections:

The status quo: 2003, a $748,000 revenue gain; 2004, a $519,000 gain; 2005, a $4.67 million loss; 2006, a $4.92 million loss; 2007, a $5.17 million loss.

Remodeling: 2003, a $408,000 gain; 2004, a $184,000 gain; 2005, a $5 million loss; 2006, a $5.24 million loss; 2007, a $5.49 million loss.

Building a new facility: 2003, a $975,000 gain; 2004, a $744,000 gain; 2005, a $4.37 million loss; 2006, a $4.54 million loss; 2007, a $4.72 million loss.

Closing the facility: 2003, a $6.5 million loss; 2004, a $2.73 million loss; 2005 through 2007, a $2 million loss each year.

When the financial analysis was released in March, Bretl explained that the first-year cost of closing the facility is high because of the one-time cost of moving patients to other facilities. As that process takes place, the center would serve a declining population that is paying the bills with consistent staff and overhead costs.

The ongoing $2 million expenditure in the closing scenario is due to the fact that the county is responsible for funding the nursing home care of some people regardless of whether or not it runs a nursing home.

Without its own nursing home, the county would receive bills from other nonprofit or proprietary nursing homes for the care of people the county is responsible for, Bretl said.

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