At a legislative meeting last month, Rep. Dan Dockstader asked Wyoming State Health Officer Dr. Brent Sherard if the state's five health care facilities are a cost-effective use of state dollars.

It's a question Sherard says he gets often.

It's a question he says officials in the Wyoming Department of Health ponder every day.

The Legislature set aside about $137 million in the 2007-08 budget to operate the State Training School, State Hospital, Pioneer Home, Retirement Center and Veterans' Home.

The $137 million makes up about 10 percent of the health department's $1.4 billion biennium budget.

Health care financing, which includes Medicaid and Medicare, makes up the largest portion of the health department's budget, accounting for $962 million, or 66 percent of the budget.

The five facilities cost the state more than the entire substance abuse division, which accounts for $79.8 million, or 5.4 percent of the budget.

"If you've ever been to these facilities, you realize these people can't be taken care of anywhere else," Sherard said. "It's expensive."

The health department wants to study the cost-effectiveness of the five facilities and their programs in order to create a master facilities plan.

Sherard said he wants the study to look at how to best use these facilities in the future and how to make them into a regional health care system.

"The people of Wyoming do spend a lot of money on these (facilities)," Sherard said. "They are large facilities, with large budgets."

To answer Dockstader, a Republican from Afton, Sherard specifically mentioned the Training School, and he said there are instances where the facility is not being cost-effective.

"What we are seeing is Training School patients getting older, and they have been in the home for years," Sherard said. "Is it the humane thing to do, to leave them in their home? Probably, yes. Is it the most cost-effective? Probably not."

Diane Baird-Hudson, superintendent of the Training School, said the facility is expensive because it gives a high level of care that most people do not and will not ever need.

The Training School is a place for people with severe developmental disabilities and acquired brain injuries. The residents are able to receive almost all of their medical care including X-rays, dental appointments and many different types of therapy on the Training School's campus.

"In an advanced society, we take care of the ones with the greatest need," Baird-Hudson said. "It does cost more."

It also costs the state more because these facilities serve people who can't afford private nursing homes or assisted-living facilities. The Veterans' Home and the Pioneer Home both charge their residents on a sliding-fee scale based on income. Some residents pay nothing, and the state picks up the tab.

The facilities serve people private health care facilities would refuse because of their inability to pay, their complex medical issues or their mental health status.

Patients who require tube feeding are very expensive, and facilities lose money serving them. The majority of private nursing homes will not accept patients on feeding tubes, said Tony Wartman, director of social services at the Retirement Center.

"We lose money running this facility," Wartman said. The Retirement Center has several patients with feeding tubes.

Even if Medicaid paid more than $10,000 a patient per month, the facility would still lose money on some patients, he said. Medicaid reimburses on average $4,262.50 per Medicare patient every month.

"If we had to be self-sufficient, we wouldn't be able to take these types of patients," Wartman said.

Recovering dollars

Jack Tarter, superintendent of the Veterans' Home, said the cost to run these facilities isn't as great as the budgets suggest.

A percentage of the operating costs is recouped by the state and returned to the general fund through revenue from Medicaid or Medicare reimbursements, private payers or other sources.

For example, the Veterans' Home pays back 60 percent to 75 percent of its $5.15 million biennial budget. It receives money from the Department of Veterans Affairs and residents at the home.

"The state says, 'We'll pay the bills,'" Tarter said. "But we are charged to recover as much money as possible."

In the past few years, the Retirement Center has beefed up its billing and recovery efforts.

A few years ago, the facility was more than a year behind in billing. Within three months after new management and policies were in place, the center brought in more than $4 million to the state.

The State Hospital does not pay back nearly as much to the state as the other facilities do.

Paul Mullenax, business director at the hospital, said most patients lose Medicaid eligibility when they are admitted to a psychiatric hospital and Medicare pays for only 180 lifetime days in an inpatient psychiatric facility, making it difficult to recoup costs.

Also, a large portion of the hospital's services focuses on patients in the criminal justice system, for whom the hospital receives no reimbursement.

However, the hospital has been paying $500,000 to the state to pay back the funds the state gave it to build an $8.7 million inpatient hospital wing. The hospital opened in 2004.

"Try to find another state agency or facility who has paid for its building," former State Hospital administrator Dr. Pablo Hernandez told legislators.

Some of the facilities actually save the state money in other areas, Sherard said.

The Pioneer Home, an assisted-living facility, saves the state's Medicaid program an estimated $700,000 a year, according to the health department's 2007-08 budget request to the governor.

"If they weren't in our facility, then they would be in a nursing home," said Sharon Skiver, facility manager for the Pioneer Home. "Do you know how expensive it is in a nursing home?"

The average cost of a nursing home is about $38,880 per person a year, whereas the Pioneer Home costs about $25,200, the health department said in the budget request. That amounts to a savings of about $13,680 for each of the more than 50 residents at the home.

The state hopes to increase revenue by renting some of the facilities' unused buildings to other businesses or government agencies.

The Training School recently started charging rent to a high school that had been using one of the buildings on its campus for free.