Wallowa Memorial and Grande Ronde hospitals would face $1.8 million in state and federal funding cuts over the next two years if proposed reductions in Medicaid reimbursement rates for hospitals go into effect. The cuts, proposed by the Oregon Department of Human services, would likely mean decreased services and higher health care costs for insured patients, hospital officials say. In many cases, the cuts will also lead to job losses.
The reductions in Medicaid reimbursement will be considered in response to state revenue shortfalls and the resulting need to reduce expenditues for the Oregon Health Plan. However, hospital officials say cuts to hospitals would hurt, not help, the Oregon Health Plan.
The Oregon Health Plan serves 400,000 low income Oregonians. Doctors and hospitals that provide service under the plan are reimbursed with a combination of state and federal funds. Currently, the reimbursement is far below the cost of care for many hospitals and physicians.
"We support the Oregon health Plan and we want to see it succeed," said Larry Davy, chief executive officer of Wallowa Memorial Hospital. "But cutting reimbursement to hospitals won't stabilize the plan. It's a lose-lose approach - reduced state funding means Oregon loses federal matching dollars. We should be leveraging the federal dollars available to Oregon, not throwing them away."
Every dollar the state spends on the Oregon Health Plan the federal government matches with $1.50. So for every dollar the state cuts, $2.50 is removed from Oregon's economy.
Combined cuts to hospitals statewide would total $106 million through the next biennium, creating a ripple effect in the Oregon economy.
when the legislature and the governor created the Oregon Health Plan they agreed that in order to keep it sound in difficult economic times the state should not reduce the number of people eligible for plan benefits nor shift the costs to private businesses.
Instead, the original intent calls for meeting shortfalls by temporarily reducing the number of benefits the plan provides. This approach reduces the least essential services first but keeps basic benefits for all.
"There are not eacy choices here," said Ken Rutledge, president of the Oregon Association of Hospitals and Health systems. "But by staying with the original intent of the Oregon Health Plan we minimize shifting the burden of reduced state and federal funding to the private sector - in essence such shifting forces the private sector to pay for something the state can no longer afford. In stead, the plan's benefit package must be scaled back to a level that can be sustained by state and federal funding - not indirectly subsidized by businesses that are already struggling to recover from tough economic times."
In January, lawmakers will once again look at ways to balance the oregon health Plan. health care providers across the state will be watching carefully.