NASHVILLE – Gov. Phil Bredesen’s proposed cuts to the state’s expanded Medicaid program would cost state hospitals hundreds of millions of dollars and may force some of them to shut down, health care officials say.
The Democratic governor has said he needs to slash $201 million from TennCare to balance a $28.41 billion state budget. The TennCare reduction is part of $394 million in cuts to recurring spending plans.
Tennessee Hospital Association President Craig Becker estimates the loss to hospitals statewide will be about $540 million.
“There’ll be hospitals that will close over this,” he said. “We’ll lose some of our safety nets if these cuts are allowed to go through.”
One main change is a $10,000 annual cap on inpatient care for adults, which state officials say will save $51 million.
But House Minority Leader Gary Odom, a frequent critic of the administration on health care issues, agrees that “a number of hospitals … will just not be able to survive.” The Nashville Democrat has asked state officials to provide him with an analysis of how they arrived at the cap and the percentage of admissions that would be covered under it.
“I want the administration to give a detailed explanation of what they think is going to happen if this is put in place,” he said.
TennCare spokeswoman Kelly Gunderson estimates about 5,600 enrollees may exceed the $10,000 cap annually, which she said represents less than 1 percent of TennCare’s 1.2 million enrollees.
Gunderson said the cuts are among “difficult decisions in order to live within our means” and that other states are experiencing similar budget difficulties because of the poor economy.
Jason E. Boyd, interim CEO of Nashville General Hospital at Meharry, said the proposed cuts would result in a $10.5 million deficit at the hospital.
“Nashville General cannot absorb a $10.5 million cut but is hopeful the state working in concert with the hospital advocacy groups can find a solution to fund hospitals that provide a high portion of TennCare, charity and unfunded care to the citizens of Tennessee,” Boyd said.
Becker said the administration should use more of the state’s cash reserves to soften the cuts. Between the rainy day fund and TennCare reserves, there’s currently about $900 million available, and Bredesen has said he plans to dip into that to spare some state jobs and key services.
Becker and other health care officials believe there’s nothing more key than providing the best service for TennCare’s enrollees.
“It just doesn’t quite seem fair to us that they wouldn’t use those (reserves) to keep us afloat,” he said. “That’s what they’re there for, they’re rainy day funds, and it’s definitely a rainy day.”
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