Proposed cuts in Medicaid spending at Florida hospitals would hurt struggling local economies, costing thousands of high-wage jobs and hundreds of millions of dollars in related economic activity annually, according to a University of Florida study.
The study – conducted by economists Alan W. Hodges and Mohammad Rahmani of the UF Food & Resource Economics Department – looked at the multiplier economic effects of hospitals in direct spending and impacts on all other sectors of the economy.
The authors identified 233,586 direct employees of hospitals, creating full time and part-time employment impacts of 659,240 jobs in the state. The total statewide economic contributions of Florida hospitals in 2007 added up to nearly $170 billion.
“Florida’s hospitals are some of the largest employers in their communities, and deep cuts will have an impact that reaches far beyond the hospital grounds,” said Bruce Rueben, president of the Florida Hospital Association.
The FHA and Florida business groups claim that much of the higher unemployment and reduced economic activity caused by state healthcare cuts could be avoided by raising recurring revenue from a new user fee of $1 a pack on tobacco products.
The UF study found that a hypothetical $100 million reduction in Medicaid funding to Florida hospitals would reduce employment in the Florida economy by 2,187 jobs, reduce output by $258 million and reduce value added by $157 million.
“Our state has world-renowned hospitals that provide thousands of high paying jobs,” said Mark Wilson, president and CEO of the Florida Chamber of Commerce. “Florida’s healthcare sector will play a significant role in our transition to the next economy and now is not the time to cut hospital funding.”
Local hospitals typically absorb much of the healthcare costs of under-insured and uninsured patients who come in for treatment, because Medicaid reimburses them at rates less than the cost of providing the care.
Because hospitals must treat these patients, added reductions in Medicaid funding would likely impact spending in other areas. Last year, hospitals provided more than $2.5 billion in free care on a cost basis to Florida’s uninsured.
“It’s time for all Floridians to ask themselves: Is this really the way you want your state to treat the most vulnerable people in your community?” asked Tony Carvalho, president of the Safety Net Hospital Alliance of Florida. “And do you really think these drastic cuts won’t impact you? The truth is, all Floridians will feel the effects of these huge Medicaid cuts.”