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March
23, 2003
The
following op-ed piece ran in the Kennebec Journal Sunday, March
23, 2003
Governor Baldacci's proposed Medicaid cuts won't
heal
by Steven Michaud
The budget proposal currently before Maine’s Legislature contains
$19 million in Medicaid cuts to Maine’s hospitals over the two-year
budget cycle. Four things are sure to happen if this Medicaid
cut is approved:
- Maine will lose $39 million of much-needed federal funds ear-marked
for helping Maine’s neediest citizens.
- The total loss of $58 million in (state and federal) Medicaid
payments to Maine hospitals will trigger reductions in hospital
services and staff.
- The state cuts will force hospitals to shift more unfunded
costs to those with health insurance or who self-pay.
- Some hospitals, already under financial stress, may be forced
to reduce or eliminate other operations like hospital-owned
nursing homes, home health agencies and physician practices.
Everyone recognizes the state must trim spending to match lower
revenues during these tough economic times. But now is precisely
the wrong time to cut Medicaid as more and more Mainers have to
rely on this safety net for health care. Only a few years ago,
Maine expanded eligibility in Medicaid. Hospitals are now treating
more and more Medicaid patients but receiving less and less reimbursement
as a result.
Right now, Maine hospitals receive approximately 80 cents for
every dollar of services provided to a Medicaid patient. If Medicaid
is cut further, the Maine Hospital Association (MHA) estimates
reimbursement levels will drop below 70 cents.
Who makes up the difference? You do as hospitals are forced to
shift costs to other hospital users, those with health insurance
and others who self-pay. MHA has estimated that cost-shifting
for the Medicaid and Medicare government insurance programs force
hospital charges to be at least 16 percent higher than they would
otherwise be and that number will only grow if Medicaid is cut
in this budget.
At a time when everyone is concerned about the growing cost of
health insurance and the difficulty that both employers and employees
have with affording this employee benefit, the Maine Legislature
is poised to reduce Medicaid further, causing health insurance
cost pressures to grow.
Statewide, more than a third of hospitals’ finances were in the
red last year. More than half of all Maine hospitals have financial
margins below those considered adequate. Hospitals are the hub
of Maine’s health care system.
As a hospital’s financial condition deteriorates, cuts in services
and staff are necessary. In addition, hospitals fund other services
essential to providing a continuum of health care in their communities.
The ability of your local hospital to operate nursing homes, long-term
care facilities, home health services and even physician practices
could be in jeopardy if it suffers financial loses.
Already, hospitals throughout Maine are cutting back services
and staff, while striving to maintain 24 hour-a-day, 7 day-a-week
coverage of essential services.
Balancing the state budget by shifting more costs to hospitals
is not the way to solve our state’s fiscal problem. This is one
budget cut that will not heal despite the skill and dedicated
services of hospital employees throughout our state.
Maine hospitals urge the Legislature to restore funds for Medicaid
to provide essential health care services to Maine’s neediest
citizens and not worsen the health care affordability crisis for
the rest of us.
Steven Michaud of Topsham is President of the Maine Hospital
Association.
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