More Detail on the Future of the Manor

As promised, a little more detail regarding the Manor and its future.

As I noted yesterday, keeping the Manor open and functioning, unchanged, will cost Otsego County taxpayers four to six million dollars a year above and beyond the expected revenues. Given that revenues (mostly Medicaid and Medicare) are dropping every year, and expenses are increasing, that annual subsidy will increase with time.

Here are the four options for the future, as developed by the Manor Committee and Manor Director Ed Marchi:

• Option 1: No change. See above.
• Option 2: Turn in the operating certificate, and sell the building to be used as a hotel. This would get us out of the nursing home business, and leave us only with debt service (depending on purchase price) and legacy costs (retirees' health insurance, etc.), which would diminish over time. As noted yesterday, this is somewhat unattractive to a potential buyer, because current residents have the option of remaining in the building for the rest of their lives, or moving voluntarily, and the transition to a hotel could not be done until the last resident was gone. This is not an option we are likely to pursue.
• Option 3: Retain the building with reduced Skilled Nursing beds, which would be operated by the County, and find “Community Partners” to run the Medicaid Assisted Living program. This would retain most of the services currently available through the Manor, and reduce the annual subsidy somewhat, but it wouldn't eliminate it, nor would it slow down its growth. In addition, for rather technical reasons, this option would probably lose money – above and beyond the subsidy – in the range of two million dollars per year.
• Option 4: Sell the building and lease the Skilled Nursing portion of the Manor function, but reduce the number of beds. This would be economically viable (as Option 3 would not be), and would leave us only with debt service on the building (depending on purchase price) and legacy costs (retirees' health insurance, etc.), which would diminish over time.
• Option 5: Sell the building and the operating certificate to an entity which would operate the Manor, to the greatest extent possible, as it has been. This process might be costly up front, and we would need to retain staff to continue to claim outstanding reimbursements for up to a year after the sale, but it would leave us, as in Options 2 and 4, only with debt service on the building (depending on purchase price) and legacy costs (retirees' health insurance, etc.), which would diminish over time.

On Wednesday, we empowered Cathy Clarke, Board Chair, to negotiate with a well-recommended consulting company who is in the business of doing just this: helping with the transfer of health facilities.

Our first priority is still the care and comfort of our residents. Stay tuned for further develpments.