NORWICH – As it stands, reports say Governor Eliot Spitzer’s executive budget would cost Chenango Memorial Hospital over $3 million during the next five years, putting the facility into a tight financial squeeze, CEO Dr. Drake Lamen said.
“This is not a good thing for us and the community,” said Lamen. “It would have a negative effect if it were to go through as it stands ... it basically wipes out our bottom line.”
According to the Healthcare Association of New York State, the governor’s plan would cost CMH $645,000 next year and just over $3 million in the next five years. In that same time, New York state hospitals would lose $2.5 billion, the HANYS report claims.
Spitzer’s goals are to streamline the Medicaid enrollment process and to expand Child Health Plus coverage to provide health insurance for the state’s uninsured residents, 400,000 of which are children. To do so, he proposes to cut-back state Medicaid reimbursements, which Lamen said cover 10 to 33 percent of a normal hospital bill.
“There’s no more money to be squeezed from hospitals,” Lamen said.
Apart from Medicaid reimbursements, the CEO explained that smaller and smaller payments from health maintenance organizations (HMO’s) have further tightened the hospital’s finances.
“Hospitals have been squeezed for the last fifteen years,” he said. “Insurance companies want deeper and deeper discounts – they keep pushing and pushing.”
According to Lamen, over the past eight years New York state hospitals have lost $2.4 billion compared to an overall profit of $4.8 billion for HMO’s. He said further cuts would result in a halt on any new hiring, and possibly lay-offs.
Spitzer acknowledges that restructuring the state’s health care system will require hard choices, but claims the results of those decisions will relieve tax-payers from paying millions of dollars. His plan, he said, would immediately save the state $1.2 billion.
“It will take a fundamental restructuring of our health care system to make health care affordable again and to free up the resources for other urgent priorities,” Spitzer states in a Jan. 31 press release. “We will be forced to close and consolidate hospitals that have been mainstays of their communities, yet because of excess capacity, have cost taxpayers millions of dollars to support.”
HANYS also reports that 16 hospitals in the state already closed between 2003 and 2005.
A recent state study by the Berger Institute concluded that CMH should not be closed because it was an integral part of the community, Lamen said. He added that the facility adds $71.6 million in revenue to area, and contributes over $2.9 million in taxes annually.
HANYS President Daniel Sisto testified Feb. 13 in Albany at a joint legislative fiscal hearing that not only state cuts, but proposed cuts in President George W. Bush’s budget, would overwhelm health care providers.
“The confluence of these two budget proposals will overwhelm our care providers, force administrators to make agonizing decisions and ultimately imperil patient care,” Sisto said. “These cuts must be stopped.”
With heavy renovation and construction projects planned for the 2007-2008 fiscal year, Lamen said Spitzer’s unexpected freezes in Medicaid would draw CMH dangerously close to operating in the red – a hole they had dug themselves out of over the last three years.
Spitzer’s plan also targets reducing heavy spending on nursing homes and attacking Medicaid fraud by increasing staff and technology to better screen applicants.
“The savings from reform will not just be reinvested in other priorities such as education and property tax cuts,” Spitzer states. “Savings will also be spent on the kind of health care investments that make good moral and economic sense.”
Review of the budget by legislators has already begun, it will go to vote in April.