Gallatin Rest Home, Sunday A1

Residents Virginia Thoreson and Raymolee Clevenger wait to begin an art project in the activity room of the Gallatin County Rest Home on May 23.

In 1882, to address the growing number of residents needing assistance, Gallatin County built a poor farm, a place for the area’s homeless to live and work.

The state acquired the site in 1893 for Montana State University, and for about a decade, the county moved the poor farm several times, eventually finding a permanent home on Durston Road near 11th Avenue. By 1958, the poor farm had evolved into the Gallatin Rest Home, a skilled nursing facility.

For years, the Rest Home was largely self-sufficient, meeting its financial needs and building up reserves with the payments received from residents and insurers. Taxpayers provided support to the Rest Home once in the 1990s when they approved a bond measure to expand the facility.

As the health care industry has changed, the Rest Home has faced growing financial challenges. Since 2013, it has ended each fiscal year with a deficit, forcing it to use its reserves to make ends meet, said county finance coordinator Justine Swanson. The 2018 deficit reached a high of $1.2 million, prompting the Gallatin County Commission to pledge one mill annually — which was about $295,000 at the time — to the Rest Home.

Even with the county’s financial support, the Rest Home will likely have a $1.3 million deficit and its reserves will be fully depleted when the fiscal year ends on June 30.

With the declining financial situation at the Rest Home, administrator Vickie West and the county commissioners are now exploring ways to prevent its closure.

“Shutting down the Rest Home would be devastating,” West said. “All of the residents would have to be transferred to other facilities, likely outside the county. It would be a very long and hard process.”

On a recent morning, residents sat in the Rest Home’s sunny atrium, some watching birds flying around a large glass cage. Others gathered in the activity room, beginning an art project. Staff passed out brushes, canvases, paints and stencils, and residents sorted through the supplies as they figured out what to make. Belgrade High School students arrived to assist residents, some of whom planned to decorate their rooms with their work.

“This is their home,” West said. “A lot of our residents have been in Gallatin County for their whole lives and forcing them and their families to be separated and displacing them would be awful. I hope it doesn’t happen, but a lot of the circumstances of our situation are outside our control.”

The Rest Home’s financial challenges partially stem from the increase in long-term care options in the Bozeman area. Now, the elderly can choose between services like assisted living, home health and skilled nursing, whereas 30 years ago, the Rest Home was one of their only choices.

As a result, the number of Rest Home residents has declined over time. There are about 60 residents today compared to the 1990s when all 94 beds were occupied and there was a waitlist, West said. At the same time, the newer long-term care options are more accessible to those paying for their own care or using private insurance providers, leaving facilities like the Rest Home with a greater proportion of residents on Medicaid, West said.

Medicaid reimbursement for care is lower than other insurance providers. At the Rest Home, Medicaid pays about $205 per patient each day while the care costs about $280 per day, West said. With about half of the Rest Home’s residents on Medicaid, the revenue from the other residents cannot make up for Medicaid’s low reimbursement rate.

The Rest Home also has a staffing shortage, forcing West to rely on staffing agencies, which are expensive. Staffing agencies cost about $36,000 more for a full-time nurse for a year than a direct hire does. Fourteen of the 94 positions at the Rest Home are open, most of which West said she is filling with temporary workers to ensure residents receive the care they need and to meet a growing number of state and federal health care regulations.

“It’s not like we can just not hire for these positions or not use the staffing agencies because that would cut into the quality of the care we provide,” she said.

Bozeman’s other skilled nursing facilities — Mountain View Care Center and Bridger Rehab & Care Center — don’t have financial troubles and foresee being open for years to come, said Wendy Soulek, CEO of Lantis Enterprises, the company that runs the two facilities.

Lantis Enterprises faces the same reimbursement and regulatory challenges as the Rest Home, but Soulek said, “we wouldn’t be doing this if we thought we were at risk of closure.”

Lantis Enterprises, a South Dakota company that runs dozens of health care facilities, doesn’t have staffing issues in Bozeman, Soulek said. Mountain View occasionally uses staffing agencies but doesn’t have long-term vacancies or find the temporary workers too expensive. Bridger doesn’t need to use staffing agencies because it doesn’t have vacancies. It is unclear why the situation at Mountain View and Bridger differ from the Rest Home.

Like the Rest Home, Mountain View and Bridger are seeing a decline in their number of residents. About 40% of Mountain View’s 86 beds are occupied and 25% of the 100 beds at Bridger are in use. Soulek, like West, attributes the decline to the expansion of health care options for the elderly in the Bozeman area.

Mountain View and Bridger differ from the Rest Home in that they are privately owned facilities.

Across Montana, there are about 15 county-owned skilled nursing facilities with the nearest being the two in Madison County. Both facilities, Madison Valley Manor in Ennis and Tobacco Root Mountains Care Center in Sheridan, have some similar financial challenges to the Rest Home, said administrator Darcel Vaughn.

A severe staffing shortage is hindering the two facilities, requiring them to rely on staffing agencies.

If it weren’t for the shortage, Vaughn said Madison Valley Manor and Tobacco Root Mountains Care Center could fill their 71 beds. She added that she often receives calls from Gallatin County residents who say they can’t find space in Bozeman’s skilled nursing facilities, which contradicts what West and Soulek said they see.

The cost of staffing agencies combined with the insufficiency of Medicaid reimbursement and the financial burden of growing health care regulations have Vaughn brainstorming how to reorganize the Madison County facilities to keep them open.

“Closure is always on the back-burner for nursing homes,” she said. “You see more and more counties getting out of this business because it’s so complex and becoming such a liability. But I don’t think that will happen in Madison County.”

Unlike the Rest Home, Madison Valley Manor and Tobacco Root Mountains Care Center have long been supported by local taxpayers. In the early 1990s, voters approved a 17-mill levy for the two facilities and renewed the tax every four years until they decided to make it permanent in 2018. The mill levy accounts for about half of the facilities’ $8 million in revenue and the other half comes from residents’ payment for their care.

“This indicates that if it weren’t for taxpayer support, we would have closed long ago,” Vaughn said.

To prevent closure, Gallatin County is exploring ways to restructure the Rest Home, including asking voters for a mill levy like Madison County has. Other options include providing new services that bring in revenue and selling five of the Rest Home’s 10 acres. The commissioners hope to have a longer-term vision for the Rest Home by next spring when they begin their annual budget discussions.

In the meantime, West has cut services like lawn care, worked to find less expensive medical supplies and is looking to hire new employees to minimize the use of staffing agencies. She also is optimistic that changes to Medicare reimbursement for short-term rehab, which go into effect in October, could result in about $273,000 more in reimbursement annually than the current payment system does.

These changes likely won’t be enough for the Rest Home to break even going forward, West said. Instead, the county anticipates contributing more general fund money — 2.5 mills or about $750,000 — to the Rest Home for next fiscal year and may close one of the facility’s wings, consolidating residents into a smaller area, which would require fewer staff members.

“I think the Rest Home is a great thing that we do, but I don’t feel like it’s something we can continue to pull from the general fund to support,” said county commission chairman Joe Skinner.

Over the next year, the commissioners hope to hire a consultant for about $25,000 to find ways to keep the Rest Home afloat without giving it more and more general fund dollars.

“The Rest Home provides an excellent service and closing it would mean fewer options for our residents,” Skinner said. “We don’t want to do that, but we have a limited amount of money and many services we provide, so we have to look at that.”

Perrin Stein can be reached at 406-582-2648 or at pstein@dailychronicle.com. Follow her on Twitter @PerrinStein.

Perrin Stein is the county, state and federal government reporter for the Chronicle.

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