MU hospitals fearful of Medicaid cuts

Uninsured patients could undermine the hospital’s newly gained profitability.
Friday, February 11, 2005 | 12:00 a.m. CST; updated 12:33 p.m. CDT, Sunday, July 13, 2008

Gov. Matt Blunt’s proposed Medicaid reforms have some medical professionals worrying about the stability of the MU Health Care system, which recently became profitable after a prolonged financial upheaval.

For fiscal 2004, the health-care system reported a record $26.4 million profit, compared to a $30 million combined loss over the past five years. A reduction of Medicaid eligibility levels of only 5 percent to 10 percent would cause estimated annual losses of $4.5 million to $9 million, system spokeswoman Mary Jenkins said.

“Any cuts in Medicaid eligibility that would increase the number of uninsured patients are a concern for us as a safety-net provider,” Jenkins said. “If people lose their health insurance, they are more likely to postpone care until it is more extensive to treat or until their health is compromised. They are likely to seek more expensive care in hospital emergency rooms, instead of going to their doctor’s office,” Jenkins said.

Medicaid payments to MU Health Care for fiscal 2004 totaled $90.6 million, which represents 18.5 percent of its operating revenue. In 2004, MU Health Care recorded 4,579 Medicaid hospital inpatient admissions and about 81,000 Medicaid outpatient visits. In that same year, MU Health Care provided $40.5 million in uncompensated care.

Rep. Judy Baker, D-Columbia, who has a master’s degree in health care administration from MU and was a health care administrator for 14 years with University Physicians, said the proposed cuts jeopardize MU Health Care’s financial stability.

“I think that it’s a potential financial setback for the (MU) Health Care system, (and they) have worked diligently to improve their financial status,” she said. “These cuts are a type of cost shifting to the university health care system. I think that it continues to put a squeeze on an already stretched system.”

As a provider of indigent care, University Hospital’s emergency room likely will receive more patients without coverage. Throughout the state, more than 60,000 adults would lose their medical coverage over the course of the year because of Medicaid cuts. Medicaid provides health insurance for the poor, people with disabilities, pregnant women, children and older people.

Dave Dillon, vice president of media relations for the Missouri Hospital Association, said he does not know how the proposed cuts will affect specific hospitals. But he said the cuts will be costly to MU Health Care because the system provides a significant amount of indigent care. Hospitals that provide indigent care are required to give emergency medical care to people without insurance.

Under current Medicaid eligibility rules, a family of four must earn less than $14,148 annually. Blunt would reduce that number to $5,655.60. The reductions in eligibility and medical services might force low-income residents to wait for treatment until their conditions become critical.

“These are people who will no longer be able to go to the doctor, for instance, until a medical condition becomes severe enough that it requires emergency room treatment,” said Deb Hendricks, a spokeswoman for the Missouri Department of Social Services. “They won’t have access to day-to-day health care in some cases, and they will have to find their way to health clinics that provide emergency room treatment for the indigent.”

40 percent of Medicaid funding in Missouri comes from state tax dollars; the other 60 percent is from federal money. Last year, 19,608 Boone County residents received Medicaid. More than half were younger than 19.

“Someone is going to pay the cost for health care and it will probably be people who hold private insurance or hospitals who do charity care, but they can only do so much,” Dillon said. “It’s very early in the dialogue to fix a number, but there will be a lot of pain felt.”

Missouri health care advocates predict the proposed Medicaid cuts will further strain a system that is already short of accessible medical care.

Of Missouri’s 114 counties, only four have adequate access to health care, Jennifer Hill, Missouri HealthVoice director. HealthVoice is affiliated with the nonprofit Missouri Budget Project.

The problem with the proposed Medicaid cuts, Hill said, is that the state lacks the capacity to cover the number of people who would be eliminated. Those people will then have to seek indigent care, but no additional money has been set aside to reimburse those health care providers.

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