Income from nursing homes is an important part of Health and Hospital Corp.'s strategy to pay for a proposed new Wishard Memorial Hospital. The $754 million complex would replace the existing one on West 10th Street.According to Lee's story, HHC plans to acquire even more nursing homes in the coming years, as many as seven more by next year. His story is deceptively misleading, however, because of what he fails to mention in his story. Here are some of those facts:
Marion County voters head to the polls Tuesday to vote yes or no on giving the Health and Hospital Corp., Wishard's parent organization, the authority to issue bonds needed to finance the new hospital.
Corporation officials have said the project can be completed without using additional property tax revenue, and they view their nursing home operations as part of the reason why.
In 2009, nursing homes will account for roughly 42 percent of Health and Hospital
Corp.'s projected $848 million in revenue, according to Dan Sellers, the corporation's chief financial officer.
As income from nursing homes has increased, Wishard has relied less on property tax revenue. In 2009, Wishard received $24.9 million, or 5 percent of its revenue, from property taxes, down from $51.9 million, or 15 percent, in 2003, according to hospital documents.
- Lee continues to claim that HHC owns these nursing homes and simply has management agreements with American Senior Communities to operate them. What he doesn't tell you is that HHC actually leases the nursing homes from an entity owned by Eagle Care, Inc., an entity owned by the same people who own ASC. HHC merely creates a legal fiction to make it appear that it owns the nursing homes so it can qualify to receive upper limit payments from Medicaid, which effectively doubles the Medicaid reimbursement rate of its nursing homes compared to other nursing homes. Former HHC CEO Mitch Roob has called this a scam on the federal government.
- Lee conveniently omits the fact that virtually all of these nursing homes are located outside of Marion County, some in the far reaches of the state. HHC is a municipal corporation that is suppose to operate for the benefit of Marion County residents. Would we expect the City of Indianapolis to operate water and sewer services in Fort Wayne or Evansville? So why is our municipal-owned corporation doing business all over the state?
- Lee conveniently omits the fact that HHC recently closed Lockefield Village, one of the few nursing homes it operates within the municipal corporation. HHC built the nursing home, which is adjacent to the Wishard hospital campus, in only 1995 at a considerable cost to taxpayers. When HHC closed it, it received a rating of just 1 out of 5, the lowest possible rating for evaluating the nursing home's quality of care.
- Lee repeats the myth that because the nursing home scam has been so wildly successful, HHC has been able to reduce property taxes in Marion County by more than $50 million a year. Like Gutwein, Lee conveniently omits the fact that most of that reduction is the result of the passage of the 2008 property tax reform and relief law that mandated a roll back in certain tax levies, including one imposed by HHC. Taxpayers were forced to pay a 1% higher sales tax to help pay for the replacement tax dollars HHC is now receiving from the state. The truth is that HHC has banked most of the nursing home revenue windfall to spend on the hospital--nearly $150 million to date--rather than reduce our property tax burden.
- Lee continues the Star's campaign of deception by giving people the impression they are not voting to approve a property tax levy increase if they vote to approve a referendum.