Academic journal article Public Administration Quarterly

Privatization of County Nursing Homes: What Is the Debate Really About?

Academic journal article Public Administration Quarterly

Privatization of County Nursing Homes: What Is the Debate Really About?

Article excerpt

(ProQuest: ... denotes formula omitted.)


"Whatever the decision-making process employed by government, it is important that people believe the process to be fair. If citizens have confidence in the marketplace, then substantial privatization may well be legitimate. If citizens have confidence in government and more limited confidence in the fairness of the open market, then privatization may well lack legitimacy. In short, citizen perceptions matter." (Gormley, 1991). (p. 8)

This research project began with a small sign. Well, actually, a lot of small signs. They popped up in yards all around the area where one of the authors lives, "Save Golden Hill" they proclaimed. A quick Internet search revealed that Golden Hill, the county-owned nursing home, was at the center of a battle. The county manager wanted to divest the money-losing home. Some members of the county government did not. Many taxpayers agreed with the county manager. Many did not.

Like so many struggles over limited public resources, the debate over whether to divest this particular county nursing home has been lengthy, convoluted, and vitriolic at times. The accusations, the aspersions, the dramatic grand standing, the flag-waving statements of appropriate rights and responsibilities, the highly skewed presentation of governance principles, and referrals to intergenerational equity all showed, in sharp, local, detail the same tendencies as the ongoing national debate. What are our individual roles and responsibilities v. what role can, could, or should the government play were ever-present parts of the discussion.

In short, the debate over whether or not Ulster County, in upstate NY, should continue in the nursing home business is a micro-scale version of the broader, equally heated, debate about the rightful place of government and government agencies in the United States as whole. Further Internet searching uncovered similar discussions happening all around New York State. The sharp focus of the debates, and the limited geography in which they are played out, provided a natural experiment for analyzing the how and why of the debate process...which led to this analysis and article. Issues we explored included: which factors generated the most communication, how much each of the factors weighed in the various factions' communication, and whether the various factions changed their messages over time.

The factors pushing many counties in New York to even consider selling or closing nursing homes they have successfully owned and operated for decades are complicated. A key to the entire situation, however, is how NY funds such entities. Counties in NY use a significant part of their property tax collections to pay for the Medicaid costs of their county's residents. Combine that with the way county-based nursing homes have higher Medicaid patient counts and a more complicated patient mix than private nursing homes. Add in higher labor costs at county nursing homes because the staff's salary and benefits are dictated at least in part by State standards and so run higher than private homes. Subtract subsidy payments that historically had been forthcoming from the State, but which were now unpredictable and drying up. In simplified terms, you have county nursing homes that are money-losing operations, being heavily subsidized by county property taxes. As such, they seem ripe targets for county governments struggling to continue funding their basic functions. It is not an exaggeration to say that some counties in upstate NY are choosing between staffing law enforcement and staffing their nursing home. They are choosing between maintaining roads and maintaining the nursing home building. The choices are excruciatingly difficult; the consequences dire. And it is all played out upon the stage of the local media, where we did our content analysis.


The Context

There are three general categories of nursing homes. …

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