Residents Want to Keep Their County-Owned Nursing Home Public. Why Do Local Elected Officials Want to Privatize It?

In Wisconsin’s Lincoln County, the People for Pine Crest are organizing to keep their five-star nursing home from being privatized

Henry Bleifuss February 15, 2024

On an October evening in Lincoln County, Wisconsin, a group of citizens gathered outside the Pine Crest Nursing Home, a county-owned facility in the town of Merrill, holding signs with a clear message: “Not for Sale.”

Over the past eight months, members of People for Pine Crest have organized a county-wide effort to oppose Pine Crest’s sale, leading demonstrations, calling press conferences, petitioning elected officials and, in January, hosting a town hall meeting attended by 175 community members.

Then on February 12, they learned the county board will be voting on a proposal to sell Pine Crest on February 19.

Pine Crest is one of the few remaining county-owned nursing homes in the region, where it has served the local residents for nearly 70 years. As a county-owned entity, Pine Crest houses a substantially higher proportion of seniors reliant on Medicaid than a private for-profit entity will often choose to take. Community leaders contend that its privatization puts at risk the ability of residents on Medicaid to remain at the home, which has received a five-star rating from the Centers for Medicare & Medicaid Services (CMS).

Dr. Barbara Crapster-Pregont, who has seen patients at Pine Crest for over 30 years, told the audience at the January town hall, “Bottom line nationally, the public sector not-for-profit type nursing homes give better care, and I think that’s a very good reasons to stop the sale.”

In spring 2023, citing years of budget shortfalls and delayed maintenance expenses to Pine Crest’s facility, Don Friske, chair of the Lincoln County Board of Supervisors, announced that the county board was in the process of securing a broker to investigate Pine Crest’s sale. In a January interview with Barn Raiser, Friske said the county broker had brought in one potential buyer for consideration.

When asked how soon he would proceed with the sale of Pine Crest, Friske said that the board’s interest was simply about exploring Pine Crest’s market value. “I think there’s some unknowns to that question. I don’t know that I can completely answer it, simply because I don’t know what the board would want to do,” he said. “We’ve meant [for the process] to be very transparent.”

But on February 112, the county board called a closed-door special meeting of the Administrative and Legislative Committee (permitted under state law when “deliberating or negotiating the purchasing of public properties”). Documents available on the Lincoln County website show the committee has agreed to a proposal to sell, which will be recommended for approval at the county board meeting on February 19, giving county citizens a week to review the terms of the potential agreement.

“The People for Pine Crest and the county board share a common goal,” says Friske. “And that is to ensure that [Pine Crest] stays viable and is open in Merrill, and right now, having the county board explore [the option to sell] is a reasonable exercise.”

Yet, organizers with the People for Pine Crest disagree. Judy Woller, a former domestic abuse counselor who has lived in Merrill for 78 years, says the county board is rushing the sale because it is afraid to lose their majority in support of Pine Crest’s sale before the upcoming April 2 board of supervisors election.

Front entrance to the Pine Crest Nursing Home. (Tina L. Scott, Merrill Foto News)

“It’s obvious [the county board] wants to get the sale pushed through before the election,” says Woller. “If they lose their majority in the election, then they lose this opportunity because of those who don’t want the sale.” 

One of the conditions for sale listed by the county board is approval of the agreement “during or before March 2024,” thereby requiring that the sale take place before the April election. 

Woller says that she knows of at least five people opposed to the sale who have declared or are planning to run for board supervisor in the upcoming election.

One of those candidates is Todd Frederick, a local window manufacturer whose company FreMarq employs more than 40 people in the area. He says the county board hasn’t been transparent about the nursing home’s budget. “The county board continues to talk about numbers that don’t really add up,” he says. “What are we really gaining from the sale? We’re actually losing money in this deal.”

The proposed contract lists the sale of Pine Crest and an adjacent Health and Human Services building at $8.5 million, with the county responsible for $2 million in financing. The county would receive $6.5 million from the proposed buyers, Senior Management Inc., a Minnesota-based company that owns five other for-profit skilled nursing facilities in Wisconsin, and Merrill Campus, LLC, an entity formed in November 2023 with Senior Management Inc.’s CEO Grant Thayer listed as the registered agent.

Members of the People for Pine Crest speak at a recent town hall event in January. (Jenn Carrillo)

The timing has left residents with a deep sense of uncertainty over Pine Crest’s future.

“There are more than 80 people living at Pine Crest today, and none of them want to worry about where they’re going to go if Pine Crest is sold,” says Dora Gorski, a retired social worker and former Lincoln County Board member. Gorski’s husband, Ken Purdy, was a resident at Pine Crest until his death late last year.

In a letter to the Wisconsin State Journal, Gorski says that many low-income families rely on the home. Pine Crest’s sale is, she wrote, “fueled in part by short-sighted elected leaders who are determined to slash public programs that families like mine depend on, even though we’ve lived, worked and paid taxes in Wisconsin for decades.”

Board politics

The facility’s potential sale comes at a time when senior care in rural America is an emerging issue in rural areas of Wisconsin.

Lincoln County has an aging population like much of northern Wisconsin, a state that already has a higher proportion of elderly citizens compared with the rest of the country.

In 2019, the County Board elected to outsource Pine Crest’s care to North Central Healthcare (NCHC), a quasi-public organization formed from a partnership of three adjacent counties (Marathon, Lincoln, and Langlade) founded more than 50 years ago. The funding gap between operating costs and payments from residents has historically been closed through an allocation in the county budget. However, recent political shifts have imperiled the future of that funding.

Lincoln County has trended to the right politically in recent years, having been won solidly by Trump in 2016 and 2020. Like many local governmental bodies, the Lincoln County Board of Supervisors—even though its supervisors are elected on a nonpartisan basis—has reflected this shift, with 11 of its 22 seats changing occupants in recent elections (supervisors are elected to two-year terms). According to Derek Woellner, a former mayor of Merrill, this shift may have been engineered by current board chair Friske, a Republican state senator from 2001 to 2011, who helped finance candidates to the county board through a conservative Political Action Committee funded by organizations linked to Rep. Tom Tiffany (R-Wis.-7) and the local Republican state senator, Mary Felzkowski from Tomahawk.

Woellner cautions that the maneuver to seize control of the board may represent a blueprint for similar actions in other low population communities where incumbents seldom face opposition, but also attributes the Republican victories to a historic lack of organized engagement by liberals or progressives in the area.

There are 23 county-owned nursing homes remaining in Wisconsin, which face an uncertain future. Two counties to the south, in Portage County, the board of supervisors is also seeking to sell the county-owned home over local opposition.

In many rural communities, nursing homes have closed due, in part, to staffing issues. While Pine Crest itself has capacity for at least 120 people, its occupancy has hovered around 80 in recent years due to financial setbacks from the Covid-19 pandemic.

However members of People for Pine Crest, including former and current county board supervisors, say that the county board has voted to arbitrarily cut spending on public projects for ideological reasons. In 2021, the new board voted to rescind an annual county vehicle tax of $20 per car that had been instituted in 2017 and generated revenue of more than $500,000 for the county. The previous board had drawn from that revenue to help fund Pine Crest. Friske maintains that constituted a “shell game,” because he says the funds were designated by statute exclusively for use by the highway department.

Members of People for Pine Crest say that the budget hole created by the new board’s failure to renew the tax is being used as justification to privatize the facility.

Lincoln County Board of Supervisors Chairman Don Friske speaks to a reporter with Wisconsin’s NBC affiliate WJFW.

“That’s a garbage statement,” says Friske. “All we did was allow it to sunset. … When you mislead [taxpayers] on what you’re doing and you just find another way to tax so you don’t have to make the tough decisions, the taxpayers don’t like it.”

Affordable care is hard to find

The prospective privatization of Pine Crest is representative of broader national trends when it comes to care options. According to the investment bank Ziegler, transitions in ownership or sponsorship among nonprofit skilled nursing facilities and care providers reached an all-time high in 2023, a trend that has been increasing over the past decade, and fueled in part by financial struggles related to the pandemic. Since 2015, about 53% of nonprofit homes have been acquired by for-profit owners.  Should this trend continue, more low-income citizens will face rising costs for their own care or that of loved ones.

That care may also come at a lower quality. Reports on the privatization of county-owned nursing facilities by the Keystone Research Center and the American Society for Public Administration concluded that the change to private ownership  resulted in lower staffing levels, supply shortages and reduced care and oversight. In the Midwest, affordable quality care is increasing hard to find with dozens of nursing home closures in recent years.

In Wisconsin alone, more than 10% of nursing facilities have closed since 2016. Publicly owned nursing homes like Pine Crest have closed in recent years in Barron, Iowa and Pierce counties to the west. The decline in nursing home numbers has several potential causes, including staffing shortages, competition from assisted living facilities, which have lower care requirements to operate, and budgetary issues, particularly with nonprofit facilities more reliant on Medicaid reimbursements. But the result is the same—a continual decline in long-term care options, especially in rural communities that already provide few options for care. In Iowa, for example, 15 of the 17 nursing homes that closed in 2022 were in rural areas.

Note: In September 2022, the Centers for Medicare & Medicaid Services (CMS) released publicly for the first-time comprehensive data on the ownership of all U.S. skilled nursing facilities (SNFs) that are enrolled in Medicare. As of September 2022, there are 15,151 nursing homes (both nursing facilities and SNFs) nationwide, serving more than 1.3 million residents. Source: Assistant Secretary for Planning and Evaluation (ASPE).

According to the Census Bureau, 19% of Wisconsin residents are age 65 or older, and the state’s population in that demographic has increased by 34% since 2010, a trend that is projected to continue. In more rural northern counties like Lincoln, the number of old people is even greater. Research from the Center for Retirement Research at Boston College indicates the Baby Boomer generation faces increasingly significant financial hurdles due to the continuing fallout from the Great Recession. As the Boomer generation ages out of the workforce and the need for senior care increases, rural areas that already struggle economically face an impending crisis.

Mike McMahon, a member of With Many Hands, a team of community organizers operating in various parts of the country, says the need for care in these communities cannot be ignored. McMahon has been working with People for Pine Crest in their efforts to keep the nursing home operating as a public facility. He says a sale would do nothing to address the care crisis on the horizon for Lincoln and other rural counties, where access to care for both birthing and old age is becoming more limited. “You’re not supposed to be born here and you’re not supposed to die here,” he says dryly.

McMahon says the demand for care should be viewed as an opportunity for economic growth, with the need for skilled staff for facilities and for the means to train them presenting a way to chart a better course. “People have ideas about how to address the problem,” he says. “The challenge for People for Pine Crest is getting the county board to listen.”

County budget takes center stage

Proponents for selling Pine Crest on the Lincoln County Board maintain that the home’s sale is necessary for balancing the county budget, a claim complicated by its failure to renew the vehicle tax. They express concern that Pine Crest’s operational costs have spiked recently. But that increase may exist mainly on paper.

Elizabeth McCrank, the District 3 Lincoln County board supervisor and member of People for Pine Crest, says that changes in public accounting requirements at the state level resulted in Pine Crest’s operating costs appearing to rise when in actuality they may have remained largely the same. And Jason Hake, the managing director of finance & administration for North Central Healthcare, which operates Pinecrest, says that while changes in supplemental funding and Medicaid reimbursements at the state level have complicated the financial picture, the facility has been operating in the black.

McCrank disputes claims that Pine Crest has high maintenance costs, saying they are roughly in line with projected maintenance costs for facilities in other counties.

Board chair Friske says that the cost to county taxpayers for the operation and upkeep of Pine Crest is untenable. He also objects to the current nature of the deal with NCHC, saying, “If there’s any deficits, Lincoln County taxpayers have to pay those. But we have no control over the policy or how that care is implemented or staffing or acceptance of patients, so who are you going to allow in? And at what level of care is needed, and how are you going to proceed and what are your policies?” He also expresses frustration that deficits have to be covered by the county but surpluses remain with NCHC. NCHC currently services the remaining $8.5 million in debt that the county owes from borrowing $10 million in 2017 to build a rehabilitation center to capture new revenue from the facility. Friske says that debt, which now stands at about 7 million, could be paid off with funds from the sale. Members of People for Pine Crest counter that a sale might fail to live up to its financial promises and that the ultimate goal of privatization is simply to eliminate public spending that is not state mandated. 

Frederick describes a 160-page report compiled in March of 2023 by the county’s Ad Hoc Committee on Pine Crest, which described $11 million in deferred maintenance costs and capital improvements.

“Now, they’re saying it needs $23 million in maintenance. Who’s going to buy a building that needs $23 million in maintenance?” says supervisor candidate Frederick. “I’m against the sale of [Pine Crest] if it can be shown the home can stand on its own—which it has for the last 12 months.” 

Pastor Michael Southcombe of Saint Stephens United Church of Christ in Merrill, a member of People for Pine Crest, points out that while state law does not mandate that counties fund elder care facilities like Pine Crest, that may be because “most of the counties were already running them when state law was written and the idea that we would not take care of each other within our counties was anathema to the people who drafted the law.”

Rev. Michael Southcombe in his office at Saint Stephens United Church of Christ in Merrill, Wisconsin. (Henry Bleifuss)

Southcombe says that the core values of the people of Lincoln County, in particular those who have remained in the community to support it instead of moving elsewhere, are not represented by the idea of abandoning public care options. “This is not just a question of the budget,” he says. “It is a question of our values.”

A recent poll conducted by local news media indicated that most county residents may agree with Southcombe. It found that, despite the county’s conservative leanings, 85% of respondents would be willing to support an increase in county real estate taxes to fund Pine Crest. Earlier in 2023 the board had originally entertained the idea of holding a referendum on whether to increase taxes to fund the facility, but the proposal failed by a vote of 13 to 9. Friske contends that holding a referendum could have limited the marketability of the facility. Meanwhile, members of People for Pine Crest claim that the decision to not approve such a referendum represented a disregard for the desires of constituents and ultimately reveals a singular determination on the part of Friske and other board members to sell the facility regardless of what the county residents may want.

 “Looking out for our neighbor[s]”

At its core, say the People for Pine Crest, the home represents the best of what public institutions can offer. Dora Gorski explains Pine Crest’s existence as a county-owned home gives it a special sense of connection and community. “It’s people who live in Merrill [who work at Pine Crest], and they know the people at Pine Crest,” she says. Gorski also believes that a prospective buyer for the facility would likely face staffing issues as many workers at Pine Crest would potentially quit in the event of a sale, a concern supported by a survey conducted by medical staffing agency Incredible Health, which found that as many as a third of the nurses in the country were entertaining quitting in 2022.

Friske has said that the sale of Pine Crest would be contingent on permitting the current staff and residents to be allowed to remain. Questioned on how privatization might impact its availability to lower income seniors reliant on Medicaid, he says that a high proportion of Medicaid patients in private facilities in the area, as well as recent increases to payouts in Wisconsin, should ensure that the facility remains accessible. But given the mercurial nature of private enterprise and possible changes in Medicaid payouts, it seems foolhardy to forecast the stability of access to a privately owned facility in the long term.

Supervisor McCrank, who supports maintaining county ownership of Pine Crest, says the mentality of running the government like a business makes no sense in cases like this because businesses exist to generate profit while public institutions exist to serve the needs of the public.

The contrast in philosophies between People for Pine Crest and Lincoln County board members who want to see the facility privatized represent two possible futures for Lincoln County and places like it: Invest tax dollars in public care options or cut costs through privatization and risk lower income seniors losing access to care. As the cohort of Baby Boomers moves further into retirement and closer to needing long-term care options, the loss of affordable publicly owned nursing homes will exacerbate a looming social and economic disaster.

For citizens like Gorski, the future of Pine Crest is not just about business. “Lincoln County is like many places in our state where we look out for one another,” says Gorski. “Pine Crest embodies that value. Ken and I spent our whole lives working hard and looking out for our neighbor. As we age, it’s only right that our county should look out for us.”

Henry Bleifuss

Henry Bleifuss is a central Wisconsin local from the Wausau area. He attended college at UW Stevens Point where he studied history. He can regularly be found wandering the forests of upper Wisconsin with a questionable sense of direction.

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