Officials optimistic even as Valley Hi continues to lose

McHenry County's Valley Hi nursing home remains deep in the red more than a year after county leaders privatized its operations, according to figures released last week.

But amid a net income loss of nearly $2.2 million last year, county officials say there is reason to believe things are getting better.

"We've made some real good structural changes in Valley Hi," said Marc Munaretto, chairman of the county board's Finance and Audit Committee. "But the process has been slow."

Valley Hi, a $14 million, 127-bed facility near Woodstock that primarily serves county residents who cannot afford private care, has been beset by financial troubles in recent years.

With the home losing more than $2 million a year and a report declaring the facility "managerially dysfunctional" the county board voted in October 2007 to hand over its operations to Cary-based Revere Healthcare Ltd.

Since then, the company has installed its own administration, slashed costs in some areas, raised some rates and made other changes aimed at bolstering the home's bottom line.

So far, however, the home continues to spend more money than it collects - on average almost $183,000 a month in 2008.

"We've come a long way since 2007, but we're still (behind)," county board member Lyn Orphal said.

The county makes up for that shortfall with some of the $6 million it collects each year from a special levy to support Valley Hi approved by voters in 2002. However, officials do not want to dip too deeply into that fund because it must also pay for facility improvements, upgrades and, several decades off, the next new Valley Hi.

Despite the ongoing losses, officials say things are looking up for Valley HI's finances. Revenues are rising and costs are shrinking because of Revere's work.

"If we didn't make the changes in management, we would have lost more," County Administrator Peter Austin said.

Revere's work also has given county leaders a much better picture of the home's finances than what they had previously. That includes a realization that the facility probably never will operate in the black.

"Skilled nursing, especially at the indigent level, is not going to make money," Munaretto said. "We're not ready to say what (loss) is acceptable yet."