Lake County Seeks Bids For Privatization Of Winchester House
After heated discussion and impassioned appeals, county board votes 13-10 in favor of soliciting bids.
Despite pleas and arguments from employees, union members, area residents and some of its own members, the Lake County Board voted 13-10 on Tuesday to ask private companies for bids to run Winchester House.
Many board members who voted for the measure said their vote is to get information that would paint a larger financial picture for the county’s nursing home.
“This is not a vote for privatization. This is an option to explore,” said Board Member Craig Taylor.
Before the vote, County Administrator Barry Burton explained to board members that after bids are submitted and reviewed, the board can reject them all or accept the most favorable bid. The lowest bid does not have to be accepted. The 115-page request for bids forces bidders to undergo thorough scrutiny, which will include planned and unplanned visits.
By state statute, interested parties will have 30 days to submit their bids. Burton said he anticipates that it will take up to 120 days to review them.
Slippery road to privatization
Opponents of the move, including board member Mary Ross Cunningham, are wary. She summed up her negative feelings about soliciting bids by saying, “If we vote for this today, we all know where it’s going.”
Nancy Shepherdson, an 8th District Democrat state central committeewoman, called the vote a “slippery slope to privatization,” and expressed concern that quality of care will decrease if privatization eventually is approved.
“A short-term answer that infuses cash into the system is not good in the long term,” she said.
John Jenkins, president of American Federation of State, County and Municipal Employees Local 2452 and an employee of Winchester House, questioned the board’s motives, saying the union has been negotiating contracts since October 2010, and just recently learned of the Winchester House Advisory Board Commission’s decision to recommend privatization. He said the union is willing to make some concessions, but the county has not been dealing fairly with them.
Board member Diane Hewitt said she wants to deal with everyone involved fairly and believes that approving the request for bids sends the wrong message.
“I want to send a message of good faith for dealing with the unions, the employees, the residents and their families at Winchester House,” she said.
At one point during the proceedings, board member Pat Carey called for a vote to defer the motion for 90 days, saying there should be more time for contract negotiations. Her motion was defeated in a 14-9 vote.
County Board: Seeking Financial Information
County Board members voting against Carey’s motion said that in 90 days the board would be making budget decisions and wants to have all financial information regarding Winchester House in front of it to make decisions.
An advisory board for Winchester House, made up of two county board members and area residents who are experts in health care and finance, was set up several years ago to ensure the nursing home is financially viable.
The advisory board has studied revenues, quality of care, staffing and expenses. The group says the combination of flat Medicaid and Medicare payments, increasing expenses, and more options in senior housing led to them ask the County Board to solicit bids for operating Winchester House.
Part of the increasing costs is pay for union employees. They are considered county employees, and as such, they receive the same raises and benefits that other county employees receive.
County Board member Angelo Kyle called Winchester House a "sacrificial lamb," noting that it is the only department in the county that is required to be self-sustaining.
“The employees have been treated unfairly,” he said.
Caring for the poor since 1840
Winchester House has provided a home for some of Lake County’s poorest residents since the 1840s. It became a nursing home in the 1950s. It has an operating budget of about $22 million. A tax levy that provides about $3 million in revenues for the facility was approved by voters in 1982. The rest of the nursing home’s revenues are received from Medicare, Medicaid, and private insurance.
For several years, the county also subsidized Winchester House up to $9 million, said Winchester House Advisory Board member and Lake County Board member Carol Calabresa.
Winchester House was able to operate within its levy until the early 2000s, when alternatives to nursing homes, such as in-home care and assisted-living housing began to reduce the need for them.
Priorities for running Winchester House
Three priority items must be satisfied by any company selected by the county board to operate Winchester House: the right mix of patients, quality of care, and county oversight of the facility.
The request for bids calls for a patient mix of at least 55 to 75 percent Medicare/Medicaid population. This will ensure that the residents who need care the most will receive it.
The county wants oversight of Winchester House, which will be done through mandatory paperwork and a two-year contract, according to Burton.
Quality of care is the sticking point for many people involved in this process. Cunningham said she is worried that awarding a contract to a low bidder could mean low wages and that, in turn, could affect the quality of care.
“Does it make sense to put quality of care in the hands of the lowest bidder?” asked Shepherdson.
But Burton insists that staff members have created a “very thorough bid process. We go to Nth degrees to ensure quality of care, so any proposed bidder must go through a gauntlet of evaluations to make them a qualified bidder,” he said.