MAYVILLE - More details have been released regarding the two offers received for the Chautauqua County Home.
County Executive Greg Edwards' office released the information Thursday, and focuses on questions raised during last week's special meeting of the legislature.
The bids, from Absolut Care Facilities Management LLC and Altitude Health Services Inc., were considered the only two qualified offers for the County Home.
Absolut Care, which operates 12 nursing facilities in Western New York, including one in Dunkirk and one on Westfield, offered a $1.6 million-a-year lease on the home with an option to buy outright for $16 million.
Altitude Health, out of Chicago, offered $16.5 million in cash for the Dunkirk skilled nursing facility.
One concern raised last week, and addressed by the County Home's marketing firm Marcus and Millichap, regards the wages and benefits of current employees.
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According to one resident who spoke prior to the special meeting, wages would decrease, causing a decline in Dunkirk's economy.
Marcus and Millichap said in response: "(William) Rothner (Altitude Health) plans on right-sizing benefits to market levels. Getting staff levels to match acuity, using buyer power to negotiate with suppliers, and capturing acuity with technology to maximize reimbursements.
"... The staffing and benefits will be market to market, based on levels of staffing and benefits for other nursing facilities in the serving area.
"For the privatization of 11 other county nursing homes in which Marcus and Millichap has been involved, a new union was elected to replace the union serving the county home."
MEDICAID
An employee at the County Home who spoke last week expressed reservations that those on Medicaid would be pushed aside for those with better paying insurances, including Medicare.
Marcus and Millichap said in response: "According to a 2009 study of 498 nursing homes nationwide the average pay mix consists of 61.5 percent Medicaid residents, 22.3 percent private pay residents and 13.2 percent Medicare residents.
"... Therefore, simply by virtue of necessity, any operator of the of the Chautauqua County Home will need to rely heavily on Medicaid as its primary source of revenues.
"While Medicaid is theoretically a "cost-based" reimbursement system, allowing for very little profit margin, it covers most of the fixed costs for the facility, allowing the operator to garner a profit from the Medicare and private resident population."
FINANCIAL VIABILITY
Legislator Tim Hoyer, D-Jamestown, questioned a representative from Marcus and Millichap about both firms planned to make money on privatizing the home. Other lawmakers, too, were curious on the financial viability plans by the bidders.
Marcus and Millichap said in response: "... Rothner plans to implement specific revenue enhancing programs that increase the vertical integration and acuity of care.
"He plans to create an environment in which the facility provides higher volumes including occupational, speech, respiratory and physical rehabilitation. He has successfully implemented such programs at other nursing homes he has purchased in Nebraska and Arizona.
"Absolut Care plans to increase revenues by implementing programs that are complimentary to the other 12 nursing homes they operate in the Western New York region. Such services will likely include expanded secured Alzheimer's care, wound care, pain management and bariatric services."