By cutting funding for community-based services for those who have health conditions that prevent them from working or obtaining health insurance, for example, the budget would force more people to go without care or turn to hospital emergency rooms for the care they need.
The commonwealth’s hospitals are already accepting the responsibility to care for people without health coverage every day. They are providing $310 million worth of uncompensated medical care in Southeastern Pennsylvania every year.
Under the governor’s budget, Pennsylvania hospitals would face a $146 million cut in Medicaid reimbursements next year, even though the current rates amount to 17 percent less than the cost of the care they are providing. By cutting these payments for low-income patients, the budget would undermine all Pennsylvanians’ access to health care. Hospitals will be less able to absorb increases in uncovered care and therefore to sustain the services other patients count on.
This budget proposal comes on top of the governor’s current-year austerity measures, which reduced payments to hospitals for obstetric, neonatal, burn, and trauma care. The state funding cuts also would compound a likely 2 percent decrease in Medicare hospital payments as a result of an impasse over the federal budget deficit in Congress. And yet another $9 billion in payment reductions are expected to be absorbed by Pennsylvania hospitals due to federal deficit reduction and the health-care reform law.
All these reductions in payments to hospitals also jeopardize another of the governor’s stated priorities: creating “the kind of jobs that produce real prosperity.” Hospitals and health care have been among the state’s most stable sectors for employment, even throughout the recent recession. In Southeastern Pennsylvania, hospitals support one of every 10 jobs and generate nearly $30 billion a year in economic activity. As of last year, however, nearly a third of the region’s hospitals were losing money.
To sustain Pennsylvania’s fragile economic recovery and to serve those who need health care, the state budget should protect hospital payments, not reduce them further. The legislature should reject the governor’s proposed budget and craft a plan that actually achieves his very worthy stated goals: to protect the economy as well as those who cannot fend for themselves.
Carolyn F. Scanlan is president and chief executive officer of the Hospital and Healthsystem Association of Pennsylvania.