This post originally appeared at https://www.bootsandsabers.com/2023/04/23/selling-samaritan-2/?utm_source=rss&utm_medium=rss&utm_campaign=selling-samaritan-2

At the end of a very long and thoughtful process, the Washington County Board has voted to try to sell the Samaritan Campus to a private buyer. They believe that such a sale is the best solution for the residents and the taxpayers. It was not an easy choice.

Samaritan is Washington County’s long-term care facility for elderly citizens. It is largely funded by reimbursements from federal and state programs, like Medicaid, but as a county-run facility, any shortages must be covered by county taxpayers. For many years, this was not much of an issue as the facility was able to remain mostly solvent. Like so many other things, the pandemic broke the financial model.

Just like all other long-term care facilities, Samaritan is facing severe staffing challenges. It is a national problem. The increasing cost of paying for staff is outstripping the increases in funding. Even with paying higher wages and retention incentive programs, the facility remains understaffed and has a high staff turnover rate. The issue is driven by demographics where there are simply too few people willing to do the hard work of care givers. It is so severe that at least one other Wisconsin county is recruiting caregivers from the Philippines to fill the need.

This problem has put Samaritan over $4 million in the hole since the pandemic began. That is $4 million that county taxpayers are obligated to cover. In addition, the facility itself needs significant work. The building is sturdy, but it is old and needs to be renovated, if not replaced, to meet the needs of residents for years to come. Accumulating the information from two study committees and two financial analyses by Wipfli, the County Board considered three options: renovate, replace, or sell Samaritan. There was a fourth option to simply close Samaritan, but there was little appetite for that option and County Executive Josh Shoemann had promised to veto any closure. Replacing Samaritan was an expensive choice. At an estimated cost of $31 million, it would fix the issues with the facility, but still did not address the underlying staffing issues. Renovating Samaritan was less expensive at $15 million, but also did not fix the underlying issues. Also, the $15 million estimate was suspect. Whenever one starts to pull back the walls of an old building, costs tend to pile up. Selling Samaritan would not cost anything, but it is also unknown how much a private company would pay the county for the facility. The county still owes about $3.5 million on it, so hopefully any sale price would at least pay off that debt. Whoever buys it would purchase an old building in need of work and still have the staffing issues to manage. On the positive side, the building has a lot of unused space that could be used for private residents or other uses to improve the financial viability of the facility.

In the end, the decision was really about whether or not the county, and the county taxpayers, want to be in the business of running a long-term care facility. At one time there were over 100 county-run long-term facilities in Wisconsin. Now there are only 35. The private sector fills this care needs of elderly folks throughout the state and can leverage economies of scale that a single county cannot match.

For Washington County to continue to run Samaritan, they would need to figure out how to make the math work. They could try something like building out a private care facility in the unused space to subsidize the deficits, but that would put the county government in direct competition with several private care facilities in the county. Or the County Board could just accept that Samaritan would run at a loss and the county taxpayers would have to cover the difference in perpetuity. At a cost ranging into the tens of millions of dollars, this would be an expensive obligation that draws funds from other county obligations.

By voting to sell Samaritan, the County Board is seeking to protect county taxpayers from significant financial obligations while allowing a private company to bring significant resources to bear on behalf of the residents. All things considered, the County Board made the best choice.

I commend the County Board, the county executive, and all of the people who worked on a solution. Throughout the process, the focus remained on doing what they truly thought was in the best interests of the residents of Samaritan while, secondarily, protecting the taxpayers’ interests. That was the correct prioritization.