What looks on the surface like relatively small state and federal budget cuts to hospitals could mean the loss of the Tri-Cities' largest mental health services provider.
The cuts specifically affect hospitals with the "Critical Access Hospital" designation, and in the Mid-Columbia include small public hospitals in Prosser, Othello, Sunnyside and Dayton.
Lourdes Medical Center in Pasco also is designated as a Critical Access Hospital, and officials there say the combination of state and federal cuts will drive Lourdes Health Network's operating budget several million dollars into the red, causing the network to re-evaluate its spectrum of services.
The Critical Access Hospital Program was created by federal legislation in 1997 as a safety net to ensure people on Medicare have access to care in rural areas.
Hospitals with the designation get higher levels of reimbursement for treating Medicaid and Medicare patients than hospitals without the designation as an incentive to see those patients, but the trade-off is that critical access hospitals can't expand beyond 25 acute-care beds.
Even though Lourdes isn't technically rural, the state deemed it a "necessary provider" in 2005, which recognizes hospitals that care for underserved populations such as seniors and low-income people.
The designation also can be given to a hospital considered financially vulnerable, as Lourdes was in 2005 after several years of losing money. Getting the designation and restructuring -- or "right-sizing," as administrators called it at the time -- helped the hospital turn its finances around.
As part of a plan to cut Medicaid and Medicare costs, the Obama administration is proposing to cut reimbursements to critical access hospitals from 101 percent to 100 percent of reasonable costs.
At the same time, the administration has proposed eliminating the designation for any hospital that is within 10 miles of another hospital, regardless of whether other nearby hospitals are critical access hospitals.
With Kadlec Regional Medical Center and Kennewick General Hospital within that radius, Lourdes would be certain to lose its critical access designation if the policy is approved by Congress.
At the same time, Washington is proposing to reduce its reimbursements to critical access hospitals for medical care provided to Medicaid patients by $27 million statewide.
Frank Becker, Lourdes' chief financial officer, said the overall health network has been operating about $1 million to $3 million in the black in recent years, but losing critical access status and the resulting cuts to reimbursements -- as much as $7.5 million annually in a worst-case scenario -- would put Lourdes millions of dollars in the red.
"If we lose that designation, it will call into question our viability and programs we may have to trim back," Becker told the Herald.
Lourdes would have to evaluate all of the services it provides and consider getting out of business in service areas that operate at financial losses, he said.
Two key areas that could face reduction or elimination by Lourdes are its physician clinics and mental health services.
"Unfortunately, those areas are always on the margin," Becker said.
Becker said that in a good year, Lourdes breaks even on mental health services, which include the Mid-Columbia's only inpatient psychiatric beds, operation of housing for people with mental illnesses where they can have stable housing while they undergo treatment, outpatient counseling for hundreds of people with private insurance and most of the psychiatrists currently working in the Tri-Cities.
Lourdes also has a contract to provide mental health services to people on Medicaid, and provides services to people with mental illnesses in local jails.
Lourdes CEO John Serle estimated the network provides about 70 percent of the mental health services available in the Tri-Cities.
Nan Bopp, president of the Tri-City chapter of the National Alliance on Mental Illness and the mother of adult children with bipolar disorder, said losing Lourdes' mental health services would be devastating for the Tri-Cities.
"It just takes my breath away," she said.
Another state budget cut proposal would eliminate prescription drug coverage for 277,000 adults on Medicaid -- including many people with mental illnesses.
Bopp said the loss of drug coverage coupled with the loss of inpatient and counseling services would be a disaster for patients -- and the results likely would be an increase in suicides, homelessness and the number of people with mental illnesses ending up in jails.
"The truth of the matter is people with mental health problems have to be maintained," Bopp said. "That is the disease. It is there to stay."
She said the public safety ripple effect would touch everyone in the Tri-Cities, not just those with mental illnesses.
"I think the public just has to realize -- do they want street people all over? That's exactly what they're going to get," Bopp said. "I can't believe we rallied so much to have an animal shelter so we would have a quality community, and we are going to let so many people fall between the cracks and affect the quality of life for everyone."
While the cuts to Lourdes could have a significant effect on the Tri-Cities, Lourdes isn't the only hospital facing a crisis.
Fred Lamb, spokesman for PMH Medical Center in Prosser, said the small-town community hospital stands to lose $2.3 million from the reduction in reimbursements to critical access hospitals -- or about 8 percent of the hospital's annual revenue.
The hospital Thursday announced an undisclosed number of layoffs in anticipation of the cuts and is looking at other ways to save money to avoid having to reduce or eliminate any health care services, Lamb said.
"This is a reality," he said. "The funding is either going to get cut federally or statewide. All of health care is going through a reform right now. We have to maintain the quality of health care delivery as best we can. We need to have a viable hospital that is here to serve the patients and to serve their needs immediately."
Hospitals have appealed to federal and state lawmakers to find someplace else to cut, and even hospitals that don't have the critical access designation are rallying to save hospitals such as Lourdes and PMH.
Congressman Doc Hastings, R-Wash., said he would work to preserve access to health care for rural citizens.
"As a member of the Rural Healthcare Caucus in the House of Representatives, I have been a longtime advocate to see that rural areas have adequate access to quality health care," Hastings said. "I understand the importance and value of Critical Access Hospitals, as there are over 15 in the area that I represent in Congress. In the coming weeks, there will be many more proposed cuts evaluated and debated to reduce our debt, and I will continue my work to make sure that rural areas receive the quality care they need."
Rand Wortman, CEO of Kadlec Health System, said his Richland-based network views retaining funding for critical access hospitals as one of the most crucial issues in the coming legislative session.
"I personally believe if the state eliminates this, it will cause a very major crisis that nobody really understands," Wortman said. "I am confident a significant number of those hospitals would close beds and become outpatient hospitals."
And that would mean more patients showing up on the doorsteps of Kadlec and KGH, he said.
"We don't have the capacity," Wortman said. "I think Lourdes needs the support of this entire community. Certainly Kadlec, KGH and our legislators need to carry the message to the Legislature and the governor that Lourdes is a vital part of health care in this community, and they cannot function as they need to without funding."
KGH CEO Glen Marshall also expressed support for Lourdes.
"Obviously, I understand we are faced with a budget deficit, and as such everyone will be impacted," Marshall said. "I would hope that our elected leaders work on solutions that are fair and equitable to all and work hard to protect the safety net for our most vulnerable citizens. Substantial cuts to critical access facilities would harm that safety net. Lourdes provides a critical service to our community, and we need to support them in preserving that service. We do not have adequate mental health services in this state or region, and further cuts would make it even worse."
Senate Minority Leader Mike Hewitt, R-Walla Walla, whose district includes Pasco, said he plans to take Lourdes' message to the Legislature when it meets in special session Nov. 28.
"We're not going to let those critical access hospitals go," Hewitt said.