— Minnesota House Democrats are pushing against their leadership and working to fund a modest cost of living adjustment for nursing home employees. This is a good sign that some members are providing a wakeup call for the DFL leadership and its proposed budget.
The DFL House budget is looking to cut $150 million from health and human services spending while Gov. Mark Dayton, recognizing the continued underfunding of a growing segment of our state, has proposed increasing HHS funding by $170 million.
Without question, the size of HHS gives pause for any government financing because it takes up about a third of the general fund, and K-12 funding is pretty much off limits.
But for the last decade HHS has been the favorite target for either flattening spending or absorbing drastic cuts. One such area has been the nursing homes that must labor under state government control of rates it can charge. While their own costs have risen over the years, the state — fearful of its own costs rising — has frozen the nursing home rates. A 2011 study noted that nursing homes operate on a margin of about 1 percent while 20 percent of the facilities actually are working in the red by more than 5 percent.
Caregivers — the people who actually take care of our frail and elderly — earn about $11 per hour. With very trying work conditions, long hours and little pay, their ranks see about 40 percent turnover in staff.
This is not a cyclical problem but rather one that will grow as demand grows. In 2011, Minnesota’s state economist Tom Stinson and state demographer Tom Gillaspy warned the Legislature and anyone who would listen that with our aging population and the last Great Recession, we have entered the “new normal.” They forecasted that we would have slower economic growth and an increasing number of retirees. While health care spending dramatically increases after age 55, consequently so would the costs of services the state now provides through HHS.