Friday, February 19, 2010

Medicaid Cuts Hit Virginia’s Hospitals Hard

Rodger Baker, CEO and president of Fauquier Health, comments on the current budget cuts in Medicaid and what they could mean to Virginia's hospitals.

Recent visitors to Fauquier Hospital would not have found anything amiss. They experienced the same well-staffed, well-equipped, patient-centered healthcare they have come to depend on. But with $800 million in Medicaid cuts scheduled in Virginia over the next two years, it will be a strain for your non-profit community hospital to continue to provide the same level of care.

Medicaid provides insurance for low-income families and the disabled with funding from the state budget, with an equal match from the federal government. States are responsible for determining reimbursement rates. Last year, for every dollar of healthcare provided to Medicaid patients, hospitals were paid 72 cents, 6 cents lower than the year before. Experts predict that in the next two years, Medicaid reimbursement could drop to as low as 50 cents for every dollar of care.

The cuts are coming at a tough time. As unemployment has risen, more people have qualified for Medicaid and fewer have had health insurance. In 2004, Fauquier Health paid out $3,146,000 in charity care. Last year, by comparison, Fauquier Health provided $9,507,000 in uncompensated medical care.

Virginia faces a two-year budget shortfall of about $2 billion. Experts predict that another $600 million in Medicaid could be cut, in addition to the $800 million already planned. And for every Medicaid dollar that is cut, Virginia loses another dollar in federal matches.

If the additional cuts do materialize, Fauquier Hospital and Fauquier Health Rehabilitation & Nursing Center (formerly Warrenton Overlook Nursing Home) combined will lose $5.1 million in 2011; $5.8 million in 2012.

Without additional money to fund Virginia’s Medicaid program, hospitals – including Fauquier Hospital -- will be forced to cut quality, services and jobs. Hospitals are among the largest employers in many regions, and further cuts to Medicaid could eliminate 6,000 jobs in Virginia. That would mean fewer taxes for localities, loss of wages for those affected, and further drains on the Medicaid system as more people become uninsured.

Budget cuts are not unique to healthcare. Deputies’ and teachers’ positions are in jeopardy, and businesses have been forced to run lean. But people are still going to show up in the Emergency Department, and we have to take care of them.

Will our legislators take care of us?

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