State Medicaid programs around the country continue to take the brunt of legislative budget cuts in early 2010, and hospitals are feeling the heat.
For instance, the state of Virginia’s Medicaid program is slated to lose $800 million in state and federal funding from 2010-2012, and the cuts could mean a $482 million reduction in payments to providers.
The Virginia legislature will likely cut Medicaid provider reimbursement rates by $229 million, according to the Virginia Hospital & Healthcare Association. Payments to hospitals are expected to drop from 72 percent of costs to provide care for inpatient services to 68 percent in fiscal year 2011 and to 64 percent in fiscal year 2012.
At 72 percent of cost, Virginia hospitals already subsidize inpatient services by $224 million annually, said Laurens Sartoris, president of the VHHA.
“Cuts of this magnitude will place a heavy burden on Virginia’s hospitals,” Sartoris said. “They’ve already delayed capital improvement projects and implemented hiring freezes and staff reductions, and their numbers of uninsured and Medicaid patients continue to rise.”
Sartoris emphasized that a substantial hit to Virginia’s Medicaid program would almost certainly force Virginia hospitals to trim jobs and services.
State-level healthcare spending faces even deeper cuts in New York.
Daniel Sisto, president of the Healthcare Association of New York State, predicts that $1 billion in proposed healthcare provider taxes and funding cuts would cause mass job losses at New York healthcare facilities.
New York providers have already been weakend by $4 billion in cuts and tax increases over the past two years. Fifty-one nursing homes and 29 hospitals have closed since 2000.
“The healthcare system needs reform,” Sisto said. “But the implementation of the state’s multiple ‘reform’ initiatives has caused disruption, not improvement.”
Hospitals in Nevada are also bracing for Medicaid cuts this year.
Bill Welch, director of the Nevada Hospital Association, testified before the Nevada state legislature in January that he “anticipates” reductions in the Medicaid program.
“I don’t see the economy improving,” Welch told the Legislative Committee on Health Care. “If the state cuts 6 percent, Nevada will save $12 million and hospitals will lose $36 million.”
Welch said Nevada hospitals endured a 3.9 percent operating loss for the first six months of 2009, compared to a 1.42 percent loss during the same period in 2008. Eighteen percent of the state’s hospital patients qualify for Medicaid.