By Charlie at Pasty Central (Chopper) on Sunday, September 17, 2006 - 08:21 pm:
We have been asked that a lot, James. The whole project at the Hut - network and videoconference center, new pasty kitchen, restored restaurant - is all being done with private investment of the Internet service and pasty baking project which was purchased by the employees in 2001, and which will continue in their respective missions. We talk about that in an article for the Gazette this week, which gives some background about Still Waters, one of many Homes for the Aged in Michigan to close in the wake of counterproductive actions by state government:
Last week's announcement of Still Waters' closure came as a surprise to many people. The Daily Mining Gazette's 'Voice of the People' captured the puzzlement of folks in the community and revealed a need for more information about this turn of events.
To understand the heart of the issue let's go back to 1982, when a group of community leaders and dedicated volunteers were successful in designing, funding, and building the modern 70 bed facility. Still Waters filled a critical need, allowing Keweenaw's elderly residents to remain close to home. At that time, Home for the Aged (HFA) projects financed by the government required that residents of all income levels be accepted. This created a model where low-income and private-pay residents lived together as equals. Over time, as State support for low-income residents lagged behind inflation, an imbalance developed. Private-pay individuals saw regular room and board rate increases, while low-income rates were capped. Eventually this led to a loss of $300 per month for each HFA low-income resident.
One day in the mid-1990's the legislature in Lansing woke up and said, 'This isn't right. Private-pay residents should not have to subsidize low-income residents.' Unfortunately, instead of doing the right thing and increasing support for Medicaid (at a time when the State was running a sizeable surplus), they chose instead to segregate residents. In 1998 the State started financing facilities which were allowed to turn away low-income individuals.
At that time the Daily Mining Gazette published my guest editorial that warned of the consequences of such a short-sighted model change. At a hearing in Lansing I testified against public funding for a third HFA facility in the Copper Country, pointing out that a beautiful new privately financed facility for seniors (The Bluffs) was already under construction. Granted, additional capacity was needed, but a sudden government-induced oversupply of non-Medicaid beds would have a drastic effect. We implored Governor John Engler not to sign the authorization. Low-interest funding for 'private pay only' facilities would bring serious consequences for HFAs built under the previous rules. At that time I predicted Still Waters would be forced to close within 3-4 years.
My prediction underestimated 'pasty power.' By 2001, as Still Waters was failing, our home-grown fund raiser 'Pasty Central' and the related ISP project 'Pasty.NET' were just beginning to show promise as commercial enterprises. While current revenues were far less than immediate needs, the future value of these businesses proved to be a real lifeline. Employees of these division raised the necessary capital to buy the Pasty projects outright from Still Waters. Sold at the very peak of the dot-com boom, the proceeds provided a reserve fund which helped extend the life of the retirement home an additional five years.
But you can't operate indefinitely with a deficit of $15,000+ per month. Licensed for 70 beds, typically 25-30 of those became empty, because of so many private-pay beds available elsewhere. Referrals to the home were increasingly low-income individuals. The old model no longer worked.
In spite of the efforts of the Copper Country United Way, private donors and volunteers, it was only a matter of time before the board of directors would have to make some hard choices. One year ago Still Waters had discussions with another local HFA to merge operations, at which time the Pasty project found a new home in Kearsarge, to make room for the combined population in the Still Waters building. Unfortunately those merger talks were unsuccessful. Out of answers, in the face of mounting debt, the Still Waters board took a responsible course of action to announce the home's closing before winter.
Still Waters provided a comfortable, caring home for more than 800 residents over the last 24 years. The staff and volunteers were prepared to continue the operation, but they faced a fundamental problem: a state system that is broken. While subsidizing private-pay facilities with low-interest loans, the State has allowed assistance for the care of low-income elderly to slip further and further behind.
As baby boomers age and our population lives longer, the State is likely again to face the problem of a shortage of HFA beds. Communities like Still Waters will once again be needed. But we may find only abandoned structures dotting the landscape, like the old mining buildings throughout the Copper Country. Unless Lansing makes some major adjustments, the people who need help the most could be left out in the cold.
Charlie Hopper
Still Waters Administrator 1993-2003
Printed on Recycled Internet