County hospital executives warn Medicaid cuts would jeopardize their ability to provide care for charity cases
Monday, January 26, 2009, 11:36am
Hospital chief executives in St. Lawrence County are warning they are struggling to fulfill their charitable missions under current Medicaid payments, and further cuts will jeopardize their ability to provide critical services.
The CEOs of Canton-Potsdam Hospital, Claxton-Hepburn Medical Center, E. J. Noble Hospital of Gouverneur, and Massena Memorial Hospital met Jan. 21 to assess the impact on patient care of Governor Paterson’s budget proposals, which include drastic cuts in Medicaid reimbursements. St. Lawrence County hospital CEOs strongly oppose the cuts, saying the governor should instead reform the health care reimbursement and regulatory systems.
All hospitals in St. Lawrence County have as part of their charitable mission a duty to serve everyone, regardless of ability to pay. The majority of patients in St. Lawrence County receive care under the federally funded Medicare program or under Medicaid. Local governments and New York State share responsibility with the federal government for funding the Medicaid program, which is intended to insure low-income patients.
“We currently are paid 52 cents for every dollar it costs to provide service to Medicaid patients,” said David Acker, president and CEO of Canton-Potsdam Hospital.
“Imagine contracting with a builder to put an addition on your home and then paying that builder half of what it costs him to construct it. How long do you think that builder would be in business? Could that builder continue to employ people, pay his suppliers, and buy new equipment to keep up with changes and replace what’s worn out? That’s what we’re facing in healthcare in New York,” Acker said. “This is not sustainable.”
The CEOs of CHMC, E. J. Noble, and MMH confirmed their Medicaid reimbursements are at similar low levels, and have been for years. “We’re doing everything we can to control costs, but we have to pay our staff living wages and our suppliers the true cost of production,” said Mark Webster, president and CEO of Claxton-Hepburn Medical Center. “We’re also required to use the government’s reimbursement systems, which are outdated and unnecessarily complex, meaning we spend enormous amounts of time and money sorting out simply how to get paid.”
The CEOs also pointed to the skyrocketing costs of physician malpractice insurance, and the cumbersome process in New York State for approving new programs and clinics as further burdens on St. Lawrence County providers.
“We have a shortage of physicians in St. Lawrence County,” said Charles F. Fahd, II, Massena Memorial Hospital Chief Executive Officer. Fahd continued. “We’re working hard to recruit physicians, but the malpractice environment is hostile, the regulations are complex and the Medicaid reimbursements for physicians are abysmally low, making it very difficult to negotiate. For everybody’s benefit, we need to reform the way we bring services to our communities.”
The CEOs say that the unresolved malpractice situation, the regulatory environment, and the underfunded Medicaid have distracted people in New York State from what they called the fundamentals of healthcare.
“The premise upon which the Medicare and Medicaid systems were created was that the government was to pay for the reasonable cost of the care delivered,” said Acker.
“When the state is paying approximately one half of the cost of care it’s obvious that the concept of paying for the reasonable cost of that care has been lost. This is one of the most important reasons that New York hospitals are 49th in the nation in terms of operating margins, above only Mississippi,” Acker said.
“When there are no operating profits there is simply not adequate money to modernize outdated facilities or recruit the physicians that our communities need. The people of St. Lawrence County want healthy communities, and they want to know there is a safety net for people who are going through hard times. The system is failing and we’re calling on Governor Paterson to institute real reform that will fix it,” said Acker.
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