More healthcare finance news from the state and community level, where the rubber meets the road:
ALABAMA
The Alabama state legislature voted to expand the state's children's health insurance program (SCHIP) by an estimated 14,000 children. The Alabama's Children's Health Insurance Program, called ALL Kids, covers children from families making between 100 percent and 200 percent of the federal poverty level. The new budget allows the state Department of Public Health to raise Alabama's income limit for ALL Kids to 300 percent. That means the income limit for a family of two will go from $29,140 to $43,710. For a family of four, it will go from $44,100 to $66,150. Congress paved the way for expansion in February when it increased the federal tobacco tax to pay for more SCHIP coverage. The Legislature provided the matching state money necessary when it recently approved a state General Fund budget for the fiscal year starting Oct. 1. The expansion was not in the budget that Gov. Bob Riley (R) recommended to the legislature in February. The governor is reviewing the increase.
ILLINOIS
The Loyola University Health System in suburban Chicago plans to cut more than 440 jobs, or about 8 percent of its work force, as a result of the recession and an increase in patients who cannot pay their medical bills. The health system's charity care expenses increased to $31.3 million from $18.1 million for the nine-month period ending March 31. The cuts will be across the board, including 31 nurses, managers and staff at both the Loyola University Medical Center and the Loyola University Chicago Stritch School of Medicine. Of the 443 positions, 372 are from the medical center and 71 are from the medical school. In a statement, Loyola said the cuts would reduce expenses by $21 million and set the health system on a "more conservative" financial course. "Without the work force reduction, Loyola faced the prospect of a year-end loss that would exceed $50 million," the statement said.
MINNESOTA
Park Nicollet Health Services announced that it would close a clinic in Hopkins, Minn., consolidate mental health services and lay off 240 employees. Park Nicollet has eliminated more than 490 jobs in the past six months, primarily as a result of its diminished investment portfolio, a decline in patient volume, bad debt and cuts in reimbursement. The health system is based in St. Louis Park, Minn., and has more than 7,500 employees in clinical and administrative positions. It runs the 426-bed Methodist Hospital and 24 clinics in Minneapolis and surrounding communities.
MINNESOTA, Part 2
Hennepin County Medical Center in Minneapolis will eliminate 75 to 100 jobs by the end of June. It is the Minneapolis-based hospital's second round of layoffs since January. The hospital also plans to delay the purchase of property intended for a new outpatient care building. The hospital will also require administrators, managers and supervisors to take two days off without pay this year. HCMC blames cuts in state funding and reductions in inpatient volume for its financial losses. The facility lost $7 million in state funding in 2008 and another $12 million in December, as the state addressed a budget deficit. HCMC also lost $10 million in the first quarter of 2009 because of reduced inpatient volume.
OHIO
The Cleveland-based University Hospitals health system said the amount it gives to the community increased to $195 million last year, up 16 percent since 2007. The health system is the first in Northeast Ohio to reveal how much free care and community benefit it provides. The hospital system treated 5 million patients last year and is in the midst of a five-year, $1.2 billion capital improvement plan. Its total revenues increased 12.5 percent to $1.8 billion last year. About 11 percent of total revenues were spent on community benefit programs. University Hospitals Chief Financial Officer Mike Szubksi said the health system spent $101 million on a combination of charity care and uncompensated Medicaid reimbursements in 2008, and increase from $73 million in 2007.
RHODE ISLAND
Community health centers in Rhode Island will be receiving more than $4 million in federal stimulus money. Rhode Island has 10 community health centers serving some 112,000 people, according to Jane Hayward, president and CEO of the Rhode Island Health Center Association. Eight of the centers meet standards to qualify for federal funds. Two health centers, Northwest Community Health Care and Tri-Town Community Action Agency, are sharing $2.4 million over two years to provide health services to 7,380 people and create 55 jobs. The remaining eight federally qualified centers are sharing an additional $2 million to meet the increased demand for services, enabling them to serve 16,000 new patients, of whom 7,000 are uninsured. Additionally, Rhode Island health centers plan to apply for some of the $850 million in federal money set aside for capital improvements.
WASHINGTON
Washington state has dropped an attempt to cut Medicaid prescription reimbursement rates to drugstores to the lowest levels nationwide. The state will continue to pay 86 percent of the average wholesale price on name-brand drugs for Medicaid prescriptions through at least July 1. The state agency moved to lower the rate to 80 percent on April 1, claiming it was needed to save about $13.4 million a year. Pharmacy operators and an HIV patient filed suit in federal court, and a judge blocked the change, ruling that the change would reduce the quality of care for Medicaid beneficiaries.
WASHINGTON, Part 2
The state of Washington's Health Care Authority has contracted with Aetna to run the state's Uniform Medical Plan starting Jan. 1, 2010. A private contractor has handled customer service for the state-run plan for more than a decade, but a private contractor will, for the first time, take over management of the plan's physician network. The state legislature provided enough extra money in the next two-year budget to cover a 3 percent annual inflation rate in healthcare costs, but the Health Care Authority had expected an 8 percent rate. The agency has asked insurance companies that run the various health insurance plans in the state to propose changes to the plans to accommodate the lower inflation funding.