Bill to privatize 2 state facilities moves through Senate

WORLAND - With concerns that local lawmakers can't stop two area state facilities from becoming private facilities, area legislators are working on giving the communities more time to plan for any changes that might be coming.

Senate File 112, sponsored by the Wyoming Joint Appropriations Committee and moving forward through the State Senate with third reading today, would effectively put two elderly care facilities, the Wyoming Pioneer Home in Thermopolis, and the Wyoming Retirement Center in Basin, currently managed by the State Department of Health, on the auction block, for privatization, with proceeds going to state general fund.

Sen. Wyatt Agar (SD20, R- Thermopolis) said earlier this week, "The legislators of the Big Horn Basin are working together to try to restore the funding through this biennium and stretch out the timeline so that our communities have time to plan moving forward. Rep. [Nathan] Winters (HD28, R-Thermoplis) and myself had success [Monday] amending SF 112 to give us more time should the Department of Health decide the best decision is privatization."

That amendment states that the facilities "may be transferred no later than four (4) years after the [Health] department's finding to another health care provider in the area..."

Only one Big Horn Basin legislator, Sen. Ray Peterson (SD19, R-Cowley) voted against introduction of the bill last week. Agar was excused.

Agar said they are working on amendments to the budget to restore funding for the facilities.

The bill states in part, "upon a finding by the department of health that a state institution established under paragraph (a)(vi) or (viii) of this section no longer serves as a necessary means of meeting the objectives of the department of health, is not a necessary part of an integrated system designed to provide required services at institutions operated by the department of health and that the services provided at the 8 institution are otherwise available or are reasonably expected to be otherwise available in the community served by the institution: (i) Operation of the associated facilities as an established state institution may cease."

The bill passed second reading Wednesday with third and final reading expected today. The bill would then go to the House of Representatives.

LOCAL CONCERN

Thermopolis Mayor Mike Mortimore said, "Economically it will hurt the town of Thermopolis for sure. There's not going to be a private assisted living center that's going to come here and provide the same service to Wyoming pioneers."

He said the legislators are feeding a "false narrative when they say it only serves the people of this area."

According to the bill narrative for the WPH, "Constructed in Thermopolis in the early 1950s, the Wyoming pioneer home was first conceived in 1946 as the Wyoming Home for the Aged, with the purpose of providing 'care and maintenance of such residents of this State who are without means of support or who must have personal care and attention' (1946 Wyoming Session Laws, Special Session, 14 Chapter 22). Today rather than serving a statewide population or caring for those who are without other means of support, the Wyoming pioneer home serves largely as a subsidized assisted living facility generally for residents from Thermopolis and the neighboring counties."

Mortimore said, "A private business is going to be in the business to make a profit. I think in this essence, this facility, which has around 30 employees right now is my understanding, those people tend to really take good care of the people. It's not a nursing home, it's an assisted living facility. In fact it saves the state a great deal of money because it delays the time that people would need to go into a nursing home, at which point ... people get their resources paid down and get on Medicaid and the state can pay their whole way, which is $7,000 a month."

Mortimore said he is also concerned about the Wyoming Retirement Center in Basin.

"I think it will just about be Armageddon for that town," he said. "It's obviously one of the major centers in that town."

Basin Mayor Dennis Peters said the WRC is very important to the community. He added that he doesn't understand why the state would have invested a lot of money in major maintenance, including a new roof, if they were just going to get rid of the building.

Mortimore said, "These two Fremont County folks who are pushing this have steered tons of money into their community, into their facility there in Lander [Wyoming Life Resource Center] and we give kudos to them for doing that, why they think they need to tear down other communities is beyond me."

Rep. Lloyd Larsen (HD54, R-Lander) is a member of the Joint Appropriations Committee.

Mortimore said he is as conservative as anyone and believes in smaller government. He added that he believes private business can do some things better than the government.

"There are certain things, like these two facilities, that provide a service to the public, no private industry is going to do. And I'm a businessman," Mortimore said. "I don't have anything good to say about what they are trying to do."

Peters echoed Mortimore's concerns about private business.

"It doesn't set right with me. What happens if no one steps up to take over the facility?" Peters said.

Mortimore said he has concerns that once the facility is taken over by a private company (noting that any company has to work with the state for franchise leasing in the state park), if the business is not profitable the building will become abandoned and dilapidated.

Another concern is that the residents at the WPH won't be taken care of as well as they are currently. "Money tends to trump the welfare of the people," he said.

Mortimore said the Town of Thermopolis provides a lot to Hot Springs State Park, which is where the WPH is located. The state park was annexed many years ago, he said.

Included among the benefits the town provides is police coverage for the state park.

"It's a good working relationship," he said. "We really don't need a couple of legislators who have pretty much taken care of their community, trying to bring ours down in the process."

As for what might happen in Cheyenne at the Legislature this year, Mortimore said, "If people are reasonable and logical those facilities will remain as state facilities."

But, he added, "The governor's office told me it just allows for the study and then the recommendations will be made, but if you read the bill, it's kind of like you'll do the study and you'll come back in November and tell us to privatize. To me, it's a pre-determined result with a study to back it up."

According to the bill, "The property comprising the institution and any lands acquired by the state for the benefit of the institution shall be subject to disposition, lease or continued use by the state as provided by law. The proceeds from any sale or lease conducted under this paragraph shall be credited to the general fund unless specifically directed otherwise by state or federal law or a conveyance instrument."

The bill also defines WRC as, "The Wyoming retirement center was established in Basin in 1924 as the Wyoming Tuberculosis Sanitarium. It served in that capacity until approximately 1969, when it was repurposed as a state run nursing home. Today, the facility continues to operate as a nursing home, serving predominantly persons from the Big Horn Basin and a number of individuals with mental illness. Pursuant to the 2015 revisions to Wyoming law ... the Wyoming life resource center in Lander is the safety net facility responsible for providing services to persons with qualifying mental illness, not the Wyoming retirement center."

Peters said nothing has changed with the purpose for the WRC and who it serves. The only thing that has changed, he said, is the investment from the town to provide infrastructure of water, sewer and electricity to the facility.

2015 STUDY

The Wyoming Legislature tasked a Joint Legislative Executive Task Force on Department of Health Facilities in 2015 to come up with options for the state's health care facilities including the Wyoming Pioneer Home and Wyoming Retirement Center, as well as the Wyoming Life Resource Center in Lander and the state hospital in Evanston.

Several public meetings were held in Basin regarding the future of the WRC

In December 2015, Wyoming Department of Health Director Tom Forslund announced that one option was completely off the table - closing the WRC, but privatization was still an option.

At that time there were three options under the privatizing option that were outlined during the task force meeting:

- Retaining ownership of the center but leasing the operations out.

- Transferring it to a willing hospital district.

- Selling it outright to a private nonprofit or for-profit company.

FISCAL IMPACT

According to the fiscal impact prepared by the Legislative Service Office, "This legislation authorizes the Department of Health, subject to approval from the Governor, to cease operations of the Wyoming Retirement Center and the Wyoming Pioneer Home and to dispose of associated lands and structures, if the Department determines that these two sites no longer serve as "safety-net" facilities for the State. Since that evaluation is required from the Department and the Governor by Nov. 1, 2018, and no course of action has yet been determined, there is no specific fiscal impact to this bill. However, if the Department were to recommend that the facilities be closed or sold to the private sector, there are differing fiscal impacts for each facility."

The state's fiscal evaluation indicates that the Wyoming Retirement Center currently operates on a break-even basis, with the exception of major maintenance. Approximately $284,052 in general funds is budgeted to the facility on a biennial basis. This budget could be eliminated if the facility were privatized.

Since the vast majority of the general funds was removed from Unit 5060 last biennium, the facility runs on self-generated revenue (Medicaid / Medicare / VA / private pay). Fund 419 is the account that serves as the buffer between expenditures and revenues, which don't line up month to month. If the facility were privatized, this fund could be liquidated, and approximately $7 million could be reverted (once) to the general fund. The balance of Fund 419 as of Feb. 9 is $7,688,818.

The Wyoming Pioneer Home operates with an annual state general fund subsidy of approximately $1,300,000 (around 60 percent of total expenditures).

If the operation of the facility were privatized, this general fund expenditure would decrease, and the operator would likely make up these funds by raising private-pay rates or increasing resident enrollment in Medicaid.

"Neither one of these facilities provides a safety net under Medicaid," explained Rep. Mike Greear (HD27, R-Worland). "So we would like to push back on this so there's time to add some amendments and get some assurances. Unfortunately, it looks like the governor and the Department of Health want to see a plan by the communities to go private with these facilities."

Because the Wyoming Pioneer Home is part of Hot Springs State Park, major maintenance would likely continue to be the responsibility of the state, with only operation being privatized. If major maintenance was not continued this would result in around $151,092 in general fund savings based upon previous year appropriations.