The Free Press, Mankato, MN

April 6, 2013

Our View: DFL split on HHS good, but longer look needed

The Free Press

— 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.

Stinson and Gillaspy challenged the Legislature to start working on a long-term structural solution — not short cuts. They warned that state spending will shift from education and infrastructure to care and support for the aging. The duo said fundamental changes are necessary as spending pressures will increase driven by aging and health.

Well, here we are, and legislators — rather than tackle the fundamental, structural changes — continue to just see cuts as the solution. “It’s getting big so let’s make it smaller.”

When Dayton released his budget, he said it was his best judgment on what was needed to take care of those most in need. In 2012, the Republican-led House felt the same pressure and voted 128-2 to restore $18.1 million in spending cuts made the year prior to health and human services programs.

Lacking any solutions, in the short term, we need to incrementally take care of specific areas of need that have long languished such as nursing homes and mental health funding.

But starting today, the DFL leadership of both chambers needs to re-evaluate the strategy and work more on long-term structural changes, recognizing we cannot go back to the old days and instead preparing for the new horizon already upon us.