The president of the Minnesota Hospital Association said Monday that the state budget proposed by Gov. Tim Pawlenty would, if passed, harm Minnesota hospitals and unravel the state's healthcare safety net.
Pawlenty's budget would reduce payment rates for patients in state health programs, cut spending on medical education and remove 21,500 adults without children from the state's MinnesotaCare program.
MinnesotaCare is a publicly subsidized program for state residents who do not have access to affordable healthcare coverage.
"The current budget proposal would only make things worse in both the short term and the long term," said Lawrence Massa, president and CEO of the MHA. "If the governor's budget is adopted, hospitals will more than likely need to layoff more skilled workers and cut much-needed services."
Pawlenty wants to cut a total of $347 million from the state's Health and Human Services department.
Massa said that without the insurance coverage provided by MinnesotaCare, the low-income residents dropped from the program are likely to rely on hospitals' emergency rooms as their sole source of healthcare, thereby increasing hospitals' growing uncompensated care costs.
"Cutting healthcare coverage is the worse thing you can do in the middle of a recession," Massa said. "People will still get sick and will be forced to access care in the ER, which is the most expensive place to get care."
The MHA argues that healthcare providers will be forced to increase their prices for private payers to make up for the state's underpayments if the governor's budget goes into effect. This would increase the price businesses and individuals pay for health insurance, Massa said.
The proposed cuts to medical education in Minnesota would also be detrimental, Massa said. He thinks Minnesota's physician shortage could worsen if the budget passes.
"We've already seen caregivers and other staff lose their jobs because of the economic downturn and the state's previous cuts to hospitals," said Massa. "The governor's proposed budget will lead to more layoffs, fewer physicians in our work force and elimination of vital hospital community services. He should consider that hospitals are one of biggest employers in the state. Those jobs will be in jeopardy if the legislature adopts the governor's budget."
The MHA wants the legislature to retain MinnesotaCare coverage for the state's low-income population and maximize the state's share of available federal funds, including those from the economic stimulus package, preserving Medicaid dollars.
The Minnesota Hospital Association is a trade association representing Minnesota's hospitals and health systems.