hill country observerThe independent newspaper of eastern New York, southwestern Vermont and the Berkshires


News & Issues May 2015


Vermont weighs options for veterans home

Bennington facility’s subsidy becomes a target amid state budget squeeze


Contributing writer



Residents of the Vermont Veterans’ Home gather for an activity in late April. State officials have lately been debating how to fund the facility, which currently receives a $5 million annual state subsidy, and some have even suggested closing the home to help the state balance its budget.

George Bouret photo

More than 130 years ago, the Vermont Legislature voted to set up a home for aging and ailing Civil War soldiers, choosing Bennington as the site for what became the Vermont Veterans’ Home.

The home has served generations of veterans since its construction in the 1880s on land donated by local philanthropist Trenor Park, but in recent months its future has become the focus of a statewide debate.

With Vermont facing a budget shortfall of more than $100 million, some state officials have begun casting about for ways to make the home less dependent on support from the state’s general fund, which now covers about 25 percent of the facility’s costs. Others have even raised the specter of closing the home.

The result has been a sometimes emotional debate in which at least two area veterans or their families recently returned military medals to the state to protest funding proposals for the home.
As of late April, the veterans home appeared to be on its way to receiving a $5.4 million operating subsidy in the 2015-16 state budget, as requested by Gov. Peter Shumlin. But a budget bill passed by the House, while it includes this subsidy, also would establish a committee to study how the home could become financially self-sufficient by 2018.

Many people familiar with the home’s operations say self-sufficiency is unlikely.

Melissa Jackson, the home’s administrator, pointed to a state study last year that concluded the home “will always need a state subsidy, barring changes in its organizational structure.”
The Bennington facility is the second-oldest state-run veterans home in the nation, behind only Connecticut’s. The arrangement is not unique; the Web site of the National Association of State Veterans Homes lists about 150 such homes around the nation, including five in New York, two in Massachusetts and one in New Hampshire.

“They’re all run a little differently,” Jackson said.

The Vermont home has 130 licensed beds and more than 100,000 square feet of living space. The grounds include gardens and lawns, a trout pond, Bennington’s much-loved deer park, and a cemetery for residents of the home.

The home’s services include short- and long-term nursing care, rehabilitation, a nationally recognized dementia unit, and respite care for families caring for veterans at home. It is also an outreach center for local veterans’ services.

The home is open to combat and noncombat veterans, their surviving spouses, and parents of service members killed in action. Residents of any state are welcome, but almost all of the home’s residents have come from Vermont, Jackson said.

As of last month, the home’s youngest resident was 44; the oldest was 96. The average age was 81. About half have dementia.


Rising costs
The home had some operating difficulties several years ago and narrowly avoided losing federal Medicaid and Medicare funding. It has since corrected the problems and recently earned a deficiency-free rating from the federal Department of Veterans Affairs. In January, the home received an award for excellent service from Pinnacle Quality Insight, a customer satisfaction firm, based on interviews with the home’s customers.

The $5.4 million state subsidy represents about a quarter of the home’s annual budget, Jackson said.

“There was a brief period of four years when the home didn’t rely on general fund money,” she added.

But a variety of factors are behind the home’s current need for state aid.

Nationally, there’s a trend toward caring for chronically and terminally ill people at home for as long as possible. As a result, the veterans who come to live at the home “come sicker and die sooner,” Jackson said.

That means the home’s residents are more likely than in the past to require costly care, and their turnover rate is higher.

“We’re doing end-of-life care and dealing with severe dementia,” said Joseph Krawczyk Jr., a veteran and former state representative who is president of the home’s board of trustees. “The cost of caring for them is higher. The average resident is on 11 to 12 drugs. Medications are one of the most expensive things we do.”

A second major factor behind the home’s deficits is that reimbursements from Medicare, Medicaid, the VA and private insurance companies haven’t kept up with the rising cost of care.
“They all fall short,” Krawczyk said. “We need 20 to 25 percent more than they provide.”

The home’s costs are “relatively high” compared with those of private nursing homes, said state Sen. Dick Sears, D-Bennington. The staff is covered by state civil service contracts and receives wages and benefits above what a private home would pay, although supporters say the higher pay seems to translate to better care.

“Some nurses have been there 20 to 25 years,” Krawczyk said. “That’s very long for rest home and nursing home nurses.”

Despite being a state institution, the home pays the state an annual tax of about $5,000 per year per licensed bed. This tax is levied on all the state’s nursing homes.

Although it might not seem to make sense for the state to collect a tax from a facility it’s subsidizing, Jackson said the arrangement helps the state leverage more federal funds.
For fewer than a dozen veterans who have no place else to go, the home is simply home. They don’t need nursing care, so the home receives no federal reimbursements for them.

The Vermont Veterans’ Home has looked at various ways to lower costs. Last November, its board of trustees voted to reduce the number of licensed beds in the facility from 171 to 130. The home was only averaging 125 to 135 residents, so cutting the vacant beds saved $200,000 in bed taxes. Thirteen vacant positions were eliminated, and six staff members were laid off.
“Over 80 percent of our budget is fixed costs,” Jackson said. “Seventy-six percent of that is salary and benefits. We have very little wiggle room. Our staff has done an incredible job of finding ways to save money while continuing to provide excellent care.”


‘No magic number’
There have been calls to increase the number of patients to bring in more funds, but Jackson cited several challenges to keeping the home filled.

Since the home’s founding in 1884, Vermont’s center of population has shifted from southern Vermont to Burlington, a three-hour drive north. Families there are reluctant to send members so far away. The home would gladly accept veterans from adjacent areas of New York and Massachusetts, but those states don’t want to send their Medicare and Medicaid funds out of state.

Vermont has no major military base, which would tend to bring in injured veterans of more recent wars, Jackson said. Younger veterans generally are less costly to care for.

In addition, veterans from the Vietnam War and subsequent conflicts are simply much fewer in number than those who served in World War II.

Last year, for the first time, Vietnam veterans made up the largest number of admissions to veterans homes nationally, Krawczyk said.

Jackson and Krawczyk said the home has a marketing plan aimed at residents of Bennington, Windham, and Rutland counties, but Jackson said the home doesn’t have much money to implement it.

Krawczyk suggested that while having more residents might improve the home’s bottom line, that change alone would not make it self-sufficient.

“One hundred thirty beds is realistic for the number of veterans in this state,” Krawczyk said. “We’ve done the math. There’s no magic number. If we had 300 veterans, we still wouldn’t break even.”


Returning medals in protest
Early in this year’s budget debate, the Shumlin administration made several proposals to fund the home with proceeds from various forms of gambling.

Don Keelan, a Vietnam veteran who lives in Arlington, was so incensed by this idea that he returned his Vermont National Defense medal to the state -- twice. The first time, then-Secretary of Administration Jeb Spaulding gave it back it to him, saying that the administration had backed down from its original proposal. Then the administration came up with another scheme to use gambling revenue, and Keelan returned the medal a second time in February.

“The Vermont Veterans Home is a long-established state facility,” Keelan said. “Why are they thinking of using gambling funds to support it? The state doesn’t sell lottery tickets to fund the statehouse.”

Keelan said he wants to see the home funded through the state’s general fund, and he questioned whether the state was wise to reduce the number of licensed beds at the home to 130. A state study in 2013 found that Vermont would need 700 beds for veterans by 2023, not the 130 estimated in the 2014 report, he said.

“The home needs to reconcile the two studies,” Keelan said. “Their conclusions were diametrically opposed.”

He said there also are indications that Vietnam veterans are developing PTSD much later in life than veterans of the Iraq and Afghanistan wars.

“Will the state have a serious increase in Vietnam veterans needing care?” he asked.
State Rep. Mary Morrissey, R-Bennington, a member of the House Committee on General, Housing, and Military Affairs, returned her late father’s Vermont National Defense Medal to the state when Keelan returned his the second time. She said she opposed funding the home with lottery or other gambling revenues because “lottery money isn’t always sustainable.”

Vermont already has lottery games to support education funding, and Morrissey said she was concerned that the two causes would compete with each other.

“Most states fund their homes mostly or totally through state funds,” she said. “The state should prioritize its needs to make sure this is covered.”

Keelan noted that the home has a fundraising arm, Friends of the Vermont Veterans’ Home, and said the home could make better use of it.

“I see tremendous support for veterans,” he said.

Keelan helps to organize the annual Vermont Wounded Warriors Golf Tournament, which in three years has raised more than $120,000. About half of that money was given to the veterans’ home. Fund raising “could remove the burden of going to the state for capital funds,” he said.
Krawczyk countered that the home would still need operating funds. By law, donations to the home can only cover capital improvements such as buildings and furniture, he said.


‘A matter of setting priorities’
The options of privatizing or closing the home don’t seem to be getting serious consideration at this point.

Morrissey said either option would ultimately cost the state money. If the home were to close, the state would have to return $11 million in federal grants. Nearly 200 staff members would be out of jobs, which Jackson said would have a ripple effect costing perhaps another 200 jobs locally. The total economic impact of closing could be as much as $36 million, and the home’s 130 residents would have to find someplace else to go.

Morrissey, Keelan, Krawczyk, Sears, and others want to see the home become a budget line item like other state agencies, “so we don’t have to go through this every year,” Morrissey said.
Krawczyk said the home’s needs are small in the context of the state’s finances.
“The state can raise taxes for everything else,” he said. “It’s a matter of setting priorities.”
Sears is on the Senate Appropriations Committee, which in late April was working on its own version of a state budget. He called the House deadline of 2018 for self-sufficiency “very unrealistic.”

“We’re trying to take that language out,” Sears said. “We don’t want the home to close.”
Sears suggested cutting costs by making better use of some of the home’s space, ensuring that patients receive all the federal funds to which they’re entitled, and getting authorization to replace some of the full-time staff with less expensive part-time workers.

He said he expected the Senate to complete its budget bill in late April, after which the budget would return to the House for reconciliation. The final vote on the spending plan will be between May 1 and the Legislature’s adjournment on May 15.


Lecture at Slate Valley Museum