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State healthcare cuts threaten FMC
Franklin Medical officials are holding their breaths to learn what state budget cuts as well as health care reform legislation working its way through Congress will mean for the hospital.
Gov. Bobby Jindal recently announced the cuts to close a $248 million deficit in the current-year state budget.
Health care services, to be slashed by about $108 million, are expected to bear the biggest brunt of spending cuts.
The state is citing a downturn in sale tax collections in a bad economy for revenue shortfalls.
Jindal was able to make the cuts to close Louisiana's spending gap without the legislature by using the governor's discretion to reduce spending of state agencies by three percent.
Since rural community hospitals, like Franklin Medical, primarily operate on what they receive from the state and federal government, officials are waiting to see how the cuts will effect the facility.
"More than 80 percent of our patients have their health care paid for by government, either by Medicaid or Medicare. Somehow, things are going to change, but we have no idea how," said Franklin Medical CEO Blake Kramer.
Jindal said health care cuts would primarily come from reductions in medical provider rates under Medicaid, or what providers are repaid by the state for services and medicine they give patients using Medicaid.
About 20 percent of Franklin Medical patients are Medicaid patients, according to hospital officials.
"When you consider that we have a substantial amount of Medicaid patients, you are looking at a cut to what we get as 20 percent of our revenue," Kramer said.
Whether are not the hospital will suffer from the cuts, however, depends on what kind of health care providers will be forced to endure spending reductions.
Kramer said it's possible other health care providers, like physicians with private practices that accept Medicaid patients, would face cuts before hospitals.
It also depends on what happens in Washington.
Sen. Mary Landrieu received a promise of $300 million in federal money to help keep Louisiana's Medicaid program solvent in return for her supporting the Senate's health care bill.
The infusion of federal money could be a shot in the arm for the state Medicaid program, but it isn't certain how the final bill might read or even if it will become law.
"Nobody knows what the health care reform bill will look like," Kramer said.
Whatever the outcome, Franklin Medical has no plans to stop seeing Medicaid patients, he said.
There has been no official word from the Louisiana Department of Health and Hospitals, but Linda Welch, executive director of the Louisiana Rural Hospital Coalition, expects as much as a five percent across the board spending reductions to be coming soon.
Any loss of revenue would be a lot for rural hospitals like Franklin Medical that operate on paper-thin margins, she said.
"Whatever cuts our hospitals get is devastating to them - it's a real cut," Welch said. "The end result is a loss of jobs and services."
Currently Franklin Medical operates with a $ 9 million deficit from what it able to collect to what it charges, Kramer said.
Health care officials say the situation is more dire since federal money given to the state after Hurricane Katrina is drying up.
There isn't much Louisiana legislators can do to provide additional funding for rural hospitals like Franklin Medical until more is learned about what the future hold, said state Rep. Noble Ellington, D-Winnsboro.
"There is a lot of uncertainty with the cuts that care coming up, but the country boys are going to have to stick together and take care of our hospitals," he said. |
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