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Faust Article: High Stakes for Hospitals and Nursing Homes in Budget Solution

Tuesday, April 21st, 2009 at 5:29 am

timfaustArticle Written By Rep. Tim Faust (DFL-Hinckley)

Over the next few weeks, the Legislature and Governor will be working together on a solution to balance our record budget shortfall. In doing so, we all understand that difficult, potentially painful spending cuts will be required to close the gap. However when it comes to health care, we must find a solution that preserves the hospitals, clinics nursing homes and care providers who we all count on so much.

Simply put, the quality health care we receive from our hospitals, clinics and nursing homes can make the difference between life and death for us or our family members. Hospitals, medical clinics and nursing homes offer us convenience when a family member isn’t feeling well. They offer us comfort through our decade-long relationships with family doctors who know our name, face and family history. It can be easy to take for granted the skilled, first responders, nurses and doctors who are ready at any moment to provide us quality health care in case of a medical emergency.

There are three budget proposals before the Legislature. The Governor, House and Senate each have a different budget approach that involves significant cuts to the health and human services budget, but the House proposal is more targeted to protect rural hospitals and to prevent closures and losses of jobs.

In comparison, the Governor’s budget will result in an estimated $700 million cut to hospitals throughout the state. This includes indirect cuts by eliminating MinnesotaCare health insurance for all adults (MinnesotaCare is for low income working families whose employers don’t offer health insurance eligibility).  It also includes direct cuts such as a reduction in Medicaid payments, delaying other medical payments, and eliminating Medicaid quarterly payments. The cuts to Medical Assistance are especially difficult for hospitals because they will also lose a dollar-for-dollar match from the federal government.

Along with direct cuts, hospitals will feel the strain of an increase in uncompensated care provided in emergency rooms to the uninsured. The changes in MinnesotaCare eligibility as well as the uptick in job losses is expected to increase the amount of uncompensated care provided in Minnesota hospitals by $400 million. Hospitals recoup some of those losses by charging higher rates, which in turns increases health care costs for all Minnesotans who have private health insurance.

I have spoken with the hospital and nursing home administrators throughout the district about the Governor’s proposed health care budgets. In total, the Governor’s budget result in approximately $8 million in cuts for Kanabec Hospital in Mora, Pine Medical Center in Sandstone and Lakeside Medical Inc. in Pine City. These losses represent about a 20% drop in revenue. Cuts at this level would be nearly impossible to sustain without job cuts or suspension of certain services such as mental health services or physical therapy.

It’s not realistic to think we can pass a budget that doesn’t have any cuts to health care or hospitals. But it should be our goal to spread cuts in a responsible, targeted method so we can protect the most important priorities and values that keep our communities healthy and strong like our schools, hospitals, clinics and nursing homes.

We don’t know for certain when this recession will be over, but it will eventually end and we will recover. It only makes sense to pass a balanced budget that ensures our hospitals, clinics and nursing homes will still be there for us when it ends.

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