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Valley Hi privatization not in plans

Published: Thursday, March 13, 2014 4:49 p.m. CDT • Updated: Friday, March 14, 2014 12:36 a.m. CDT

WOODSTOCK – Don’t expect to see a “For Sale” sign in front of Valley Hi Nursing Home anytime soon.

The conventional wisdom of the McHenry County Board committee that helps oversee the taxpayer-owned nursing home west of Woodstock is that ceding ownership to a private agency is a nonstarter for the foreseeable future.

After a Wednesday discussion, the Public Health and Human Services Committee decided there is no need for the county to divest itself of Valley Hi, Chairwoman Donna Kurtz said.

The idea sprang from a goal in the latest version of the board’s three-year strategic plan to seek potential privatization or partnerships throughout county government, according to County Administrator Peter Austin.

“If it’s not broken, do not fix it,” Kurtz said Thursday. “When we try and get ahead of ourselves to address problems that don’t exist, we create more problems.”

The committee is more amenable to determining whether some services can be outsourced. But they first want to hear ideas from the Operating Board that directly oversees the nursing home.

The Strategic Plan states the County Board should provide efficient services in order to operate at the lowest tax levy possible, and do that in part through alternative delivery options and occasionally evaluating programs to determine whether they should be continued.

“What we’re doing across the board is looking for alternative service delivery,” Austin said.

Valley Hi makes its revenue through Medicaid, Medicare and private pay, and is augmented by a property tax levy approved by voter referendum. Unlike many privately run nursing homes, Valley Hi’s rates are all-inclusive and include services, medication and other essentials.

While it has run in the black since 2011, not counting the levy, that has not always been the case.

A scathing 2007 outside audit called Valley Hi “managerially dysfunctional” and revealed the home had run in the red since 2001, and ended 2006 with a $2 million deficit. The taxpayer levy, then $6 million, is what kept Valley Hi’s budget whole.

The home’s former administrator resigned in the wake of the audit, and the County Board temporarily turned over management of Valley Hi to Cary-based Revere Health Care, which over three years brought the nursing home much closer to profitability by keeping cost increases low while significantly increasing income.

The County Board in 2010 reassumed control of Valley Hi, hired new Administrator Tom Annarella and gave oversight to a County Board-appointed operating board similar to how other Illinois counties run their publicly owned senior homes.

After at least a decade of running deficits, Valley Hi ended fiscal 2011 in the black – a feat it has repeated every fiscal year since. The County Board subsequently lowered Valley Hi’s levy from $6 million to $5.25 million, and lowered it again to $4.5 million on this year’s tax bills.

But county staff and board members note Valley Hi’s surpluses are not particularly large. Furthermore, chronically late state payments and the unknowns of the Affordable Care Act must always be kept in mind for the future.

The nursing home’s 2014 budget of $14.36 million makes up about 5.8 percent of county government’s total budget of $247.9 million.

The Northwest Herald put the question of keeping or privatizing Valley Hi to the 13 candidates running in contested Republican races for County Board. Ten supported keeping it under county control, one said he would like to explore taking it private, and two did not directly answer the question.

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