Tri-City hospitals are bracing for an influx of patients seeking basic health care in emergency rooms as the state prepares to cut health care programs to fix a $5.1 billion budget deficit.
The budget proposal released by the House of Representatives this week makes $4.4 billion in program cuts, including hundreds of millions from health programs.
Although the House budget keeps the state's Basic Health subsidized insurance program for low-income people alive, it would cut $108 million from the program and drop enrollment to 41,200 people -- as compared with monthly averages of about 64,000 people enrolled in 2010.
Enrollments in Basic Health already have dropped by more than 40,000 people since 2009 because of budget cuts. Most came through attrition as people left the plan, but new enrollments were frozen except for certain groups such as Washington National Guard members and people returning to the plan after having lost Medicaid coverage.
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At the same time, the program's waiting list had grown to 136,500 by the end of 2010, according to the program's annual report.
Frank Becker, chief financial officer of Lourdes Health Network in Pasco, said cuts to Basic Health enrollment will mean more uninsured people in the community and a strong likelihood those people will turn to hospital emergency rooms for their care.
"Basic Health is going to be a significant hit," Becker said. "It's hard to quantify what that will be. ... They will end up becoming charity care more than likely."
Charity care is the hospital term for treating people who can't pay because they're low-income or uninsured. Lourdes and Kadlec Regional Medical Center in Richland said they are seeing increases in the amount of charity care they've provided since 2009. Data for Kennewick General Hospital was unavailable.
"It is important to state the hospitals, particularly the emergency rooms, serve as the safety net for the community," said Jeff Clark, Kadlec's vice president of human resources. "The state may cut funding for a program such as Basic Health, mental health, Disability Lifeline, but that does not stop the need and when people need medical care the hospitals provide it as charity care."
Clark said Kadlec has seen its charity care grow from $15 million in 2009 to $21 million in 2010. And that number is expected to grow again in 2011.
"These are challenging times for everyone, and Kadlec will do our best to meet the needs of our community," Clark said.
Lourdes reports it provided $10.7 million in charity care in 2009 and $13.3 million in 2010. The Pasco hospital estimates its charity care for fiscal 2011, which runs from July 1, 2010, through June 30, 2011, at about $14.2 million.
"It's very concerning," Becker said.
At the same time, hospitals are seeing direct cuts from the state in reimbursement levels for health care provided to Medicaid patients.
Clark estimated Kadlec will experience about an 8 percent cut to reimbursements, which amounts to several million dollars per year.
"This is particularly painful because the hospitals last year asked the Legislature to impose a 'safety net assessment,' i.e. tax, on ourselves to increase federal matching dollars to mitigate some of the cuts from the 2009-2011 budget," Clark said. "Our understanding is the proposed budget would continue the assessment but not the additional reimbursement to hospitals and direct that funding to other programs of the state."
The Washington State Hospital Association estimated the loss to Kadlec from the safety net assessments at about $4.4 million for the 2011-13 biennium, which runs from July 1, 2011, through June 30, 2013.
Becker said Lourdes is somewhat insulated from the cuts to safety net assessment reimbursements because of its designation as a critical access hospital. That's a federal designation designed to help certain kinds of hospitals improve their financial performance and avoid hospital closures by providing higher payments for care provided to Medicare patients.
Lourdes is paying $40,000 to $50,000 per year into the safety net assessment that it won't get back, Becker said.
Hospitals aren't the only local health care providers being affected by cuts. The House budget proposes cutting $89 million by changing the way Federally Qualified Health Centers, such as Tri-Cities Community Health, are paid for services.
Linda Gustafson, board president for Tri-Cities Community Health, said the Pasco-based clinic is looking at somewhere between $1.3 million to $1.6 million in direct cuts, but also will be affected by cuts to Basic Health and other health programs such as maternity services and adult dental care.
The clinic, formerly known as Community Health Center La Clinica, serves as many as 30,000 patients. It relies on having enough patients with insurance to be able to provide care on a sliding scale to those who are uninsured or underinsured.
And a lot of the insured patients the clinic sees are on Basic Health or Medicaid, so cuts to those programs affects the balance of money coming in, Gustafson said.
The clinic already has been operating at a loss since November, and expects to be $400,000 in the red for 2011, she said.
"We have some difficult choices we're going to have to make," she said. "Our goal is we do not want to cut (patient) services."
Gustafson projected that more patients will seek care in emergency rooms if Tri-Cities Community Health is forced to reduce services.
The clinic's board is looking to a union contract now under negotiation for some savings, in part by asking union members to pay a larger share of their own health care costs.
Union officials say they have offered to discuss freezing pay and benefits, but talks have been at a standstill for months.
Gustafson said she finds it ironic that the state is making cuts to primary health care that will drive people into more expensive emergency room care.
"To balance the budget on the backs of the most vulnerable of your population -- the old and the young who won't have access to the health care tomorrow that they do today -- is really short-sighted and I am sure the money we cut today will have to be paid somewhere else tomorrow," she said. "I'm worried patients will have less access to the medical care they need."