Since the beginning of the economic decline in 2007, the public conversation in Maine has focused on keeping and creating jobs. Policymakers have identified employment as one of the greatest motivators for economic stability, and significant efforts have been made to stimulate hiring.
Unfortunately, pursuit of this priority has become endangered in Maine by significant underfunding of one of the biggest employers in the state — nursing homes.
At Marshwood Center, one of Lewiston’s largest non-municipal employers with 128 employees, we struggle daily with the financial realities of having the state’s MaineCare program as our largest payer. At the center, 59 percent of the residents are dependent on that funding, which makes our bottom line heavily dependent on those funds.
Over the past 10 years, the state has barely adjusted the reimbursement rate for nursing homes.
As salaries, energy and other costs have risen, the state has refused to keep pace, ignoring even the standard “cost of living” increase in operational costs faced by most employers today.
That has put significant financial pressure on Maine nursing homes, limiting staff benefit options, delaying expansion or renovations and, for some facilities, causing outright closure.
The state’s decision to underfund reimbursement has had a negative economic impact on the state. Maine’s nursing homes are significant economic engines with 10,000 employees statewide, generating millions of dollars of in-state spending for goods and services annually.
In our communities, we are one of the biggest employers and a major customer for local businesses.
Unlike other industries, a significant portion of our budget is dedicated to personnel, who spend their salaries to support their families in our local communities. Few funding decisions the state can make will as directly flow to Maine working families as the dollars it spends to fulfill its obligation to its MaineCare nursing home residents.
For example, in 2013 approximately 70 percent of our routine expenses was dedicated to personnel.
Nursing homes provide stable jobs that people are desperately looking for in Lewiston and around the state. Many positions do not require the advanced technical training that is a barrier for so many people entering or re-entering the workforce.
Once a caregiver has the appropriate certification or licensure, we can provide on-the-job training and continuing education opportunities annually. Demographically, the majority of our employees are women with a high school degree, many of whom are the primary breadwinner for their household.
Our economic impact goes far beyond employment.
Each year we purchase goods and services from a network of vendors in Lewiston and around the state. Major expenditures include our electric bill, heating costs, food, medical supplies and numerous other line items.
All of these expenditures have a positive impact on the businesses we buy from, greatly expanding the positive impacts on the broader economy.
Nursing homes have an economic multiplier effect for the state dollars that they receive.
First, the funding is matched by an even larger amount of federal funding. Then, our facilities spend directly on the goods and services we need, including quality benefits for hundreds of employees. At the next level, our employees use their salaries to operate their own family budgets.
Maine’s policymakers must keep all of these economic benefits in mind as they consider the impacts that underfunding MaineCare reimbursement is having on nursing homes.
No business, for-profit or nonprofit, can continue indefinitely without an increase. One Maine nursing home closed and more are discussing the possibility as our industry tries to deal with the more than $25 million annual funding gap from the state.
Last summer, the Maine Legislature created a special, bipartisan committee to review this situation, and the group suggested recommendations that would correct the funding gap and implement responsible cost-of-living increases going forward.
Given the critical services that nursing homes provide and the major economic impacts that we have around the state, enacting these recommendations is critical to securing the future of Maine’s nursing homes.
Maine’s economy can’t afford to let MaineCare funding levels threaten the major economic benefits and large-scale employment of Maine’s nursing homes.
The long-term care commission’s recommendations are urgently important and should be implemented before the gap creates major economic losses for our state.
April Nichols is administrator of the Marshwood Center in Lewiston.
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