Lori Sturdevant: Budget-hungry nursing homes are so last century

Funny how some interview snippets get stashed in the memory bank. Here's one with former Gov. Al Quie, circa March 2007, that I keep mulling:

Q: How did you manage to get an expensive new education program (special education, a first in the nation) through the Legislature in 1957? The state budget was in the red in the 1950s, year after year.

Quie: Yes, but that was just before we started paying for nursing homes.

Hmm. So already 50 years ago, this state's leaders knew that the young and the old were rival supplicants for public money -- and that chances were good that when money got tight, one or the other, or both, would suffer.

The young GOP state senator from Dennison was off to Congress in a 1958 special election. Twenty years later, when he left Washington to run for governor, the state budget had ballooned, from about $550 million per biennium in 1960-61 to $6.2 billion in 1978-79.

Inflation ran up those numbers. So did the need to educate the baby boom generation and accommodate a growing population. But so did Minnesota's subsidy of institution-based care for its frail, low-income seniors -- a bigger move than made by most other states.

Relying on nursing homes for elder care suited Minnesota in the middle of the 20th century. By the time Quie was governor, no self-respecting town was without its own care facility. And no politically astute legislator would vote against subsidies that kept nursing homes full, even after their occupants' bank accounts ran dry. These facilities provided not just care, but jobs.

Still, $7 of every $10 Minnesota spends on long-term care goes to nursing homes. And the "elderly and disabled basic care" line in state budget documents shows an expected 25 percent spending increase in 2010-11 over 2008-09.

My guess: Numbers like those will come in for hard scrutiny in 2009, which looks to be a big red-ink year at the Capitol.

The patch the 2008 Legislature put on the leaky state budget was temporary. It will fall off when the 2009 fiscal year ends next June. Keep state services at current levels (that means keeping up with inflation) in fiscal 2010-11, and a $2 billion deficit appears. That's based on February's forecast -- which in turn was based on $75-a-barrel oil. Last week's price: $135.

If state lawmakers have a major state deficit on their hands, they're bound to cast cold eyes on a 25 percent boost in long-term-care costs.

That will be true even though nursing homes have a lot of friends at the Legislature, in both parties. This year, they had enough support to rank right beside public schools and win small bumps in support while other state programs were cut.

Fortunately, the state's long-term-care industry is a forward-looking lot. They are so eager to redefine their role -- and, in so doing, help rein in state costs -- that they want new labels for their labors. They're not "nursing homes" providing "long-term care." They're in the "senior services" business, helping to create "communities for a lifetime."

Fortunately, too, the Citizens League is on the job. It convened two days of meetings last week about the future of elder care in Minnesota, involving several dozen stakeholders, including seniors themselves.

Ideas were popping, several participants reported -- including the "do-it-yourself" one my colleague Jill Burcum describes on these pages today. Some of the others:

•Create a tax-advantaged savings program for elder-care needs, similar to an existing college savings plan.

•Think of the transportation needs of schoolchildren and the elderly not as two problems, but one.

•Provide more incentives and support for family caregivers.

•Free communities and care providers from federal and state program rules, and give them grant support for the senior services they most need. A pilot program like this was approved by the 2008 Legislature.

Demographics are reason enough to get serious about such ideas. Minnesota can expect its over-85 population to swell from 95,000 in 2005 to 324,000 in 2050.

Toss in a multibillion-dollar state deficit, and the tension Quie acknowledged between spending on the young vs. the old will be back in force. This time, it should be creative tension.