Funding problems loom for local nursing homes

Posted: 8:00 PM EDT May 18, 2013   Updated: 8:30 AM EDT May 20, 2013

Phoebe Ministries has operations in Allentown and five other counties including Berks.  It serves the diverse needs of thousands of seniors every year.

"Organizations that have a large skilled nursing presence are really facing challenges," shared President and CEO Scott Stevenson.

The hard truth is that skilled service comes at a cost.  At Phoebe, 70% of revenue comes from the skilled nursing population.  But the amount of Medicare and Medicaid reimbursed by the government continues to decline.  Medicare is a federal program that covers those 65 and older and those with certain disabilities.  Medicaid is a joint federal and state program that helps pay health-care costs for individuals and families with limited income and resources.

"Right now our Medicaid reimbursement doesn't even cover our cost of care on a daily basis," explained Stevenson.

That shortfall translates into charity care.  Phoebe pays the difference when the resident can't, and they're proud of it.  But the outlook isn't bright.

"With the way the economy is, and what we're hearing out of Washington and out of the state, I would be surprised to see anything significant come our way."

In 2008 the organization provided $5.2-million in charity care.  Last year that number jumped to its highest level yet, $10.8-million.

"We anticipate this year they'll get to the $12-million level," shared Stevenson.

Multi-million dollar deficits at other nursing homes in the area has forced them to consider selling, leasing or privatizing the facilities.  At Phoebe, leaders say the organization is being proactive, they're forming new programs and they're not going anywhere.

"We'll continue to be very strategic in our approach to growth to make sure that we continue to maintain high levels of charity care," said Stevenson.  "But we also need to generate cash and margin to sustain the operations of this ministry."

The number of folks aged 80 and over is projected to quadruple over the next 27 years.  So these are services that are definitely needed.