Florida hospitals cringe at proposed cuts to Medicaid

By Lisa Greene, Times Staff Writer
In print: Wednesday, April 16, 2008

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Paying patients could face higher hospital bills and more crowded emergency rooms if proposed state budget cuts to Medicaid take effect, Tampa Bay area hospital leaders said this week.

Hospitals may also have to end some services or cut back on planned expansions, they said.

"This is going to have a devastating impact," said John Dunn, spokesman at Tampa General Hospital. "There aren't many businesses that could absorb a hit of $18-million to $26-million and not get badly bruised."

To cope with the state budget crisis, lawmakers have proposed cutting millions of dollars in hospital care for the poor. The Senate would cut more than $506-million, while the House would cut more than $468-million.

Lawmakers want to reduce the amount the state pays hospitals for patients of Medicaid and two special programs, the Medically Needy program and the Medicaid program for the aged and disabled.

Hospitals that offer the most care for the poor would be hit hardest.

"It's a terrible year," said Tony Carvalho, president of the Safety Net Hospital Alliance of Florida. "I've never seen anything like this. The type of programs that are being cut are pretty disappointing."

For example, more than half of the patients at All Children's Hospital in St. Petersburg are on Medicaid. The hospital stands to lose up to $9.8-million, or nearly 5 percent of its operating budget.

Tampa General stands to lose more money than any hospital in the state except for Miami's Jackson Memorial.

Such a large cut might hurt Tampa General's credit rating, Dunn said. The hospital also fears its emergency room costs will rise, because poor people affected by the other cutbacks in medical assistance programs will be more likely to wait for care until they have a health crisis.

Hospital leaders are especially frustrated because cutting the state's Medicaid budget means losing even more money in federal matching funds. For instance, under the House proposal, Tampa General would lose $8.3-million in state funds and $10.3-million more in federal dollars.

"It's very hard to support the logic of that, where you give up that federal matching money," said Arnie Stenberg, chief financial officer at All Children's.

Stenberg and others said it's hard to decide where to cut, because a hospital isn't a typical business.

"We're doing everything we can to avoid having reductions in our core programs," he said. "You can't just pick something and say I'll quit doing the ER, or I'll quit doing trauma, or I'll quit doing transplants."

At All Children's, possible cuts might mean the hospital doesn't add beds in the neonatal unit at its new hospital. Programs to educate the public on preventing injuries or childhood obesity might be slashed. Research studies might be cut.

"We still have every intention of standing by our mission," Stenberg said. "We will care for all children regardless of ability to pay."

Other hospitals said they are less certain, although some said they might charge paying patients more.

"There is no doubt that these cuts are significant," said Lisa Patterson, spokeswoman at St. Joseph's Hospital in Tampa. "But exactly how we will respond to them, it's just too soon to tell."

St. Joseph's could lose nearly $9-million. By comparison, it costs the hospital more than $7-million each year to run its Level 2 trauma center, Patterson said.

At Bayfront Medical Center in St. Petersburg, chief financial officer Bob Thornton said the cuts "would be a crippling blow." The hospital could lose up to $6.5-million.

"The costs of providing the important care our patients need continues to rise every year, while the funding … continues to be threatened," Thornton said.

The Orlando Regional Medical Center could lose more than $17-million. According to the hospital alliance, that's equivalent to the hospital's cost for staffing 262 nurses, delivering 4,800 babies or admitting 4,300 children as patients.

As deep as the cuts for hospitals might be, hospital leaders said the impact would hurt their patients more.

"A lot of these people are the working poor," Dunn said. "They're trying to hold onto jobs. They're trying to feed their families. We're concerned about what's going to happen to them."

Lisa Greene can be reached at greene@sptimes.com or at (813) 226-3322.