The spell cast last December by a consultant's report on Pleasant Ridge Manor has dissipated as its best-case scenario has steadily become more grounded in real-world numbers and concerns.
And Erie County Council's indecision, which seems to be playing out to good effect in this case, means it's highly unlikely the county could replace its two existing nursing homes with a new one in time to meet the August 2013 federal deadline for having sprinkler systems in all nursing homes. The existing homes don't have sprinklers.
"We have to make a decision on what we're going to do," Councilman Ronald Cleaver said in June, urging his colleagues to make a call by early July.
"We need to make a decision. ... Let's do something, stand by it, and move on from there," Cleaver said just the other day.
The proposed home's best hope was the manufactured urgency surrounding the report from council's consultant, Complete HealthCare Resources, which laid out a case for how a new home conceivably could pay for itself.
County Council waited until July 2010 to begin seriously sorting out its options for meeting the sprinkler mandate, which was set in 2008. When Complete HealthCare weighed in last December, it said council would have to make the call by May to complete a new home in time.
That led to a January vote to pursue the plan by a council majority that initially seemed willing to substitute wishful thinking for due diligence. But the time squeeze never generated enough momentum to get council to commit as the consultant's target date came and went.
Meanwhile, events and new information have provided a reality check on some of Complete HealthCare's assumptions, which are hard to square with financial and political reality.
The consultant's case for a self-supporting new home projected, for example, annual pension costs of about $685,000, based on a 10-year average rooted in very different economic times. The county's actuary in September told council to expect 2012 pension costs to top $2.2 million.
Some council members have discussed freezing Pleasant Ridge employees' pensions in favor of a 401(k) plan, as many private companies have done. That would take the hit down to about $1.4 million, the actuary said, still more than double the figure in Complete HealthCare's model.
Pensions are just part of it. The consultant said Pleasant Ridge's labor costs in general are "far and above greater than other similar providers in the market."
Local experience makes it hard to imagine a union operation overseen by a board of politicians extracting sweeping concessions, and perhaps contracting out support services, to bring its costs in line in a fairly short time frame. But in a business as labor-intensive as nursing homes, anything else would swamp the break-even scenario.
All of this is happening in the context of runaway federal and state deficits and the looming political struggle over the future of the huge government health-care programs from which Pleasant Ridge gets most of its revenue. Anyone in the nursing home business who isn't sweating that just isn't paying attention.
The ticking clock and scary numbers have left some County Council members who have supported a new home now expressing a willingness to consider something short of that and the more than $60 million in long-term debt service the county would have to guarantee. It might be the only realistic option at this point, and it wouldn't prevent council from revisiting the issue down the road.
County Executive Barry Grossman -- who lacks formal standing because of the way Pleasant Ridge is set up, with council acting as its board of directors -- continues to advocate selling the Pleasant Ridge homes and getting the county out of the nursing home business. More likely is something along the lines of what Councilman Phil Fatica proposed to his colleagues in late October.
Fatica suggested investing in sprinklers and other improvements at Pleasant Ridge Manor-West, in Fairview Township, closing and perhaps selling Pleasant Ridge Manor-East, in Millcreek Township, and housing the residents of both homes at the Fairview facility. Pleasant Ridge Chief Executive Robert Smith said that plan, which would eliminate up to 80 jobs, would take at least six months to execute.
My guess is that council approval of such a plan would spell the de facto end of prospects for building a new home. But it would at least buy time for county officials to track what happens with Medicare and Medicaid, and for advocates of a new home to prove up front that they have the political will and stomach to deliver the major labor savings the enterprise would require.
Write to Managing Editor Pat Howard at 205 W. 12th St., Erie, PA 16534, or e-mail him at pat.howard@timesnews.com.
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