Published May 1, 2003 | May 2003 issue
By 2025, over a fifth of all residents in rural South Dakota will be 65 years old or older, say demographers, and increasing numbers therefore will likely find themselves in nursing homes, if there's enough money.
The majority of patients in South Dakota's nursing homes, about seven of every 10, are on Medicaid, the government health plan for the poor. The problem is that Medicaid reimburses nursing homes according to average cost figures that were set in the late 1990s, and actual costs have risen significantly since that time. According to a recent analysis by BDO Seidman, a financial consulting firm, nursing homes in South Dakota are underfunded by about $24 million a year, meaning that they lose $16.54 per patient per day.
The problem was compounded last October by a 10 percent cut in reimbursement rates to nursing homes for patients on Medicare, the federal plan for seniors. About 7 percent of South Dakota nursing home residents are on Medicare.