Hospital officials eye state budget
Local hospital officials are keeping a close eye on Gov. Ed Rendell’s 2003-2004 budget and are hopeful that, while the Legislature has already passed it, the spending plan that goes into effect July 1 will provide more rather than less. During his budget address two weeks ago, Rendell proposed $600 million in cost containment measures to the Medical Assistance program. Proposed reductions include $261 million in provider payment adjustments, $193 million in curtailed costs for managed care, $111 million in program eliminations and $39 million in cash flow adjustments.
Jim Proud, vice president of human resources and marketing at Uniontown Hospital, said officials there are still reviewing the finer points of the budget, in an attempt to determine what effect the proposal will have on patient care.
“Despite the budget that has been put forth, we still don’t have a clear picture in our mind as to fully what is going to happen,” he said. “It is safe to say that, given the overall environment of economic health of hospitals and the health-care industry, any decrease in reimbursement is completely unacceptable to not only us, but hospitals in general.”
He said hospital reimbursements, at their current rate, are not covering the costs associated with treating certain segments of the population. The hospital administration is looking at the budget to determine an impact analysis, Proud said.
“It is a continuing struggle for hospitals to meet their mission of caring for patients, irrespective of insurance, and still make ends meet,” he said.
John Andursky, chief financial officer for Highlands Hospital in Connellsville, said Medicaid is not covering all of the hospital’s costs, and to cut reimbursements even further would have a negative effect on hospital operations.
He said Rendell has proposed eliminating “disproportionate share payments,” which are made to hospitals that care for a higher percentage of Medicare patients and poor patients. The payments now do not fully cover the cost of patient care, but Andursky said doing away with them will only exacerbate, not alleviate, the problem.
He said the hospital would attempt to reduce costs if the budget, as approved by the House of Representatives on March 6 and passed through the Senate on Wednesday, remains in its current form. Hospital officials from throughout the state plan to lobby legislators to reinstate the funding before the end of the fiscal year.
“To keep this reduction in the budget is detrimental to the administration of hospitals statewide,” Andursky said. “I don’t know that they have thought that through. This is going to force added pressure on hospitals in an already difficult environment.”
Carolyn F. Scanlan, president and CEO of the Hospital Association of Pennsylvania, said the proposed cuts coincide with increased demand for Medical Assistance benefits as a result of the weakened economy.
“The proposed budget cuts will devastate Pennsylvania’s hospitals and the entire health-care community, and the ultimate losers will be Pennsylvania’s communities and most vulnerable citizens,” she said. “These proposed health-care cuts are a prescription for disaster, and every Pennsylvania community will be forced to swallow the pill.”
She said hospitals continually are getting hammered by several “extraordinary expense drivers,” which include medical liability insurance costs, shortages of health-care professionals and disaster/bioterrorism preparedness.
“Heaping additional financial burdens on health-care providers may cripple Pennsylvania’s health-care delivery system at a time when providers have no wiggle room and devastate communities across the commonwealth dependent on the economic viability of these hospitals,” Scanlan said. “We call on the governor and the General Assembly to avoid these Medicaid reductions.”