Experts: Too soon to tell about Ulster nursing home

Neuhaus' Ulster model invested millions but laid off half its workers

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By Hema Easley

— As Orange County hands Valley View nursing home over to a Local Development Council (LDC) for eventual sale, County Executive Steve Neuhaus has pointed to neighboring Ulster County as a model he hopes to emulate.

Ulster, which like Orange was underwriting its county-owned nursing home, transferred Golden Hill Health Care Facility to an LDC, which sold it to a private operator last June. Counties across the state are looking to sell off their nursing homes because many are running at a deficit. Neighboring Rockland County is currently looking for a buyer, but Ulster has completed the process.

“Ulster County has successfully proven that the LDC model works, and we can make it work in Orange County as well,” Neuhaus said in a statement April 9 after county legislators voted 12-9, mostly along partisan lines, with Republicans favoring the transfer and Democrats voting against it.

LDCs were originally intended for use by New York's counties, cities, towns, and villages for economic development and to create jobs, according to New York State Comptroller, Thomas DiNapoli. But he now believes LDCs have been misused by local governments, and are subject to “waste, fraud and abuse." Neuhaus disagrees.

Neuhaus has not clearly articulated why he wants to transfer Valley View to an LDC. At times he has said he is using an LDC as a bargaining chip to wrangle concessions from Valley View's labor union, and not necessarily to sell it. At other times he has said the LDC will wrest management of the nursing home from the political fray. A 16-point Frequently Asked Questions about LDCs provided by the county executive's office says the legislature is already "proposing a number of high standards for any potential purchaser."

The nonprofit Center for Governmental Research, which conducted a study of 33 counties in New York that run their own nursing homes, says LDCs are typically created to sell the property.

“I haven’t seen a case where an LDC was created and a sale wasn’t contemplated,” said Erika Rosen, associate director of the Center and project director for the report. “It’s usually (done for the purpose of) subcontracting a sale that is contemplated.”

She added that an LDC “can streamline the process. It...adds another layer so that the county is one step removed from the sale. It insulates lawmakers from the process and the (political) pressures.”

What measures success?

Neuhaus did not say how the Ulster experience was a success. His spokesman, Dain Pascocello, pointed to a newspaper article in Ulster County that said concerns over whether the county should sell its nursing home to a profit-making company have proven to be unfounded.

A Power Point created by the county executive’s office also stated that, in the case of Ulster County, jobs remained in the community, residents were not displaced, families participated in the process, and residents continued to have access to high-quality care.

Golden Hill’s transition to a private operator took place just nine months ago — too soon, experts say, for it to be declared a success. Rosen said good guidelines to determine success in the long run was to see its impact on residents, families and staff.

When Golden Hill was taken over by VestraCare, it laid off all employees and required them to reapply for their jobs, according to media reports and the CSEA that represents Golden Hill employees. Shannon Cayea, the chief executive officer of VestraCare told the Daily Freeman that about 50 percent of the 244 employees were rehired though the CSEA said less than half were offered jobs. Ulster County paid out more than $1.5 million in separation costs to employees, the Daily Freeman reported.

The remaining employees are still working without a contract nine months after they were rehired.

Steve Madarasz, director of communications for the CSEA, was hesitant to say why no agreement had been reached on a contract. Negotiations are ongoing. The CSEA is the same that represents Valley View employees.

“It usually centers around wages, benefits and working conditions,” said Madarasz. “We are satisfied that the employer has recognized the union and is working in good faith.”

He added: “We’ve had a lot of concerns about using an LDC because it removes accountability and raises questions about transparency. But you have to move forward with the circumstances you’ve been dealt with.”

The Daily Freeman quoted the head of the Golden Hill Residents’ Council as saying that, in some cases, matters had improved at the facility, including the quality of food and the number of physical and occupational therapists.

The new owners have also a planned a $3 million improvement to the facility. Unlike Valley View, the infrastructure systems at Golden Hill were on the verge of imminent failure, county officials had warned, According to media reports, an 88-year-old woman died after contracting an infection that was traced to the facilities water pipes.

The ombudsman representing nursing home patients in Ulster declined to discuss how residents were faring under the new owners or if there had been any complaints. The long-term care ombudsman in Albany did not respond to requests for comment. A spokesman for the state Office of the Aging was also not available.

Meanwhile, a group of workers and residents of Valley View have filed a lawsuit, demanding that the transfer of Valley View to an LDC be nullified. The suit, against Neuhaus, the Orange County Legislature, and Orange Valley View Development Corp., contents that under state law, a supermajority is needed to eliminate a county department. The legislature vote was two votes short of that (see related story).

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