When the joint Subcommittee on Health and Human Services voted in Helena to cut funding and privately contract the operation of the Montana Veterans Home, a shock wave rippled through the Flathead Valley.

The veteran community has reacted angrily. Dean House, state judge advocate of the Veterans of Foreign Wars, counts himself among the angry.

“The VFW is really upset,” he said.

House said local veterans were caught off guard by the committee vote to cut funding for the veterans home in House Bill 2, the state appropriations bill.

“They slipped it into H.B. 2 so the veterans’ groups couldn’t fight it,” he said. “That’s my understanding.”

He points out that none of members of the committee now live in the Flathead Valley. Sen. Mary Caferro, a member who lists her hometown as Whitefish but now lives in Helena, voted no on cutting the veterans home appropriation.

House was working Friday to turn out as many veterans as possible for a meeting Saturday night with three local state legislators. He spoke of a possible demonstration or march at the veterans home in Columbia Falls in the near future to get the attention of the state legislators.

He and many others continue to ask the question, “What were they thinking?” when the five Republican joint subcommittee members voted Feb. 17 to reduce the appropriation requested from the cigarette tax by the veterans home by $847,545 for fiscal 2012 and by $2,268,000 for fiscal 2013. Democratic members voted no.

A review of the subcommittee discussion, available on the Montana Legislature website www.leg.mt.gov, provides a partial answer. Sen. David Lewis, vice chairman of the subcommittee and a Helena resident, made and advocated for the motion to privatize the home.

He spoke just before the vote.

“We’re talking $7 million a year for 140 FTE (full-time equivalent employees,)” Lewis said. “That’s roughly $50,000 for salary and benefits. That’s extraordinary compared to any private facility I’ve seen.”

He said several organizations in the Montana Veterans Home area have expressed interest in contracting the operation of the home.

Lewis said no one wants to talk about budget cutting, but said legislators must address it. He said the state can’t afford to spend $50,000 on every employee at a nursing home.

The bill moves next to the house appropriations committee where several hearings are scheduled, beginning Wednesday, March 2.

The senator targeted the Columbia Falls home budget based on a report prepared by Kris Wilkinson, a state fiscal analyst. Titled “Alternatives for Funding the Montana Veterans Home,” the report compares the Columbia Falls facility operated by state employees with the Eastern Montana Veterans Home in Glendive run by a private contractor.

Both facilities received five-star ratings, meaning much above average, from quality surveys by the Centers for Medicare/Medicaid, yet the annual per-patient costs varied radically. The privately operated Glendive facility had a per patient cost in 2010 of $24,445, compared to $105,571 for the Columbia Falls facility run by state employees.

Projected per-patient costs requested for the Glendive home in 2011 were $26,415 versus $99,453 for Columbia Falls patients. Budget requests for 2012 showed a significant increase for Glendive to $38,506  per patient yet the disparity remains with $117,897 per patient requested by the Columbia Falls home.

Both Eastern Montana Veterans Home in Glendive and Montana Veterans Home in Columbia Falls operate similar-sized dementia units. The Eastern Montana Veterans Home has 80 beds for skilled and intermediate nursing and other services and the Columbia Falls home has 105 beds as well as 12 domiciliary beds similar to assisted living care.

Compared with 12 other facilities with similar capacities around the country, the analysis found costs for employee benefits at the Columbia Falls home a little more than 249 percent higher than the national average.

Another chart compared the same 11 expense areas at Montana Veterans Home with facilities in the same geographic region. The difference in employee benefits dropped, but was still almost 178 percent above similar care facilities in this area.

The report attributed higher costs partly to a more competitive labor market for nursing staff.

“However, MVH costs were still approximately 90.9 percent higher than the costs of facilities in the same geographical location with significant differences between MVH and regional facilities in the overall cost of nursing services, laundry, social activities and dietary costs,” Wilkinson wrote in the report.

Staffing ratios compared to other care facilities in this region showed Montana Veterans Home higher than the national average for numbers of administrative staff, aides and orderlies, but lower numbers of pharmacists, therapists and registered nurses.

House responded that better pay and benefits attract and retain a quality staff. He said many of the Montana Veterans Home employees have held their jobs for years and have long-term relationships with veterans.

He worries about the demoralizing impact on the staff.

“There are 143 dedicated employees who are going to be forced to work for a private company for a lower wage and lose benefits,” he said.

House said this area has 10,381 living veterans who now wonder what sort of care they might expect if they end up at the home. He also worries that the veterans will bear more costs under the management of a private, profit-oriented company.

“People don’t have thousands a month to pay,” House said.

He questioned the validity of the study. House said he doesn’t know of any veterans home employees who are making huge salaries.

Kelly Williams, administrator of the Senior and Long Term Care Division of the Department of Health and Human Services, said the report was the best that could be prepared in the time available. She oversees Joren Underdahl, the on-site administer of Montana Veterans Home.

“But there was no time to really drill down and look at the differences in the facilities,” she said. “Are there some unique characteristics that are driving those costs? Until you drill down, you don’t have a good picture if it’s a good comparison or not.”

Comparing the Columbia Falls Home to Eastern Montana Veterans Home, Williams pointed out that the local veterans home includes an in-house pharmacy that also serves other veterans in this area with their prescription drug needs. It also has the 12 domiciliary beds.

“We have a huge campus,” she said. “We have a number of historic outbuildings that have to be maintained. It’s a much older physical plant.”

Williams said there was no time for a thorough analysis that needs to be done across the long-term care industry. She said the report doesn’t have the level of detail needed to make a momentous decision like fundamentally changing the veterans home.

“All facilities run differently,” she said. “There really isn’t an average facility out there. We’re not an average facility – we’re a veterans facility. Our physical plant is different and our operational philosophy is different.”

Williams said costs in Glendive differ significantly from the Flathead Valley. She said this area has higher costs of doing business.

House and other veterans question why Lewis has targeted the veterans home to capture revenue and wonder if the intention is to make up part of the general-fund deficit with the money.

“I understand the cigarette tax money was earmarked for the veterans home,” he said. “There’s nothing in the general fund that goes to those 143 employees.”

According to a Montana website, the cigarette tax is partly dedicated to funding veterans nursing homes. After tribal revenue sharing is deducted, 8.3 percent or $2 million, whichever is greater, goes for the operation and maintenance of state veterans homes.

Michael J. Bennett Jr., senior vice commander of the VFW for Montana, who lives in Bigfork, said their organization has one overriding concern — the care of veterans at the Columbia Falls home. He spends a lot of time at the facility.

According to Bennett, he sees veterans come into the home at the lowest point in their life. Within a week or two, the veterans are uplifted, talking and participating in life because of the care they receive from the staff.

“If it ain’t broke, don’t fix it,” he said.

House agreed. He said the veterans group opposes any option that would change the operation, including privatization for large cost savings.

House, a Whitefish resident, was not convinced by the five-star rating given to the privately run Eastern Montana Veterans Home, based on his experiences with privately run nursing homes he has experienced.

“The big thing is, when a home gets privatized, the care goes out the window,” House said.

Reporter Candace Chase may be reached at 758-4436 or by e-mail at cchase@dailyinterlake.com.