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Faced with a combination of Medicaid rate cuts and the effective imposition of a state provider tax on all inpatient and outpatient receipts, the state's hospitals earlier this year warned of staff cuts and reduction in outreach programs to the community. Turns out they weren't kidding.
Recently Lawrence + Memorial Hospital announced the elimination of 33 positions, one in a series of labor cutbacks in the last several months. As it predicted when Gov. Dannel P. Malloy first proposed balancing his budget in part on the backs of hospitals, L + M is eliminating worthy services it likes to pay for services it must provide.
Gone will be a teen pregnancy prevention program and a health education effort that utilized local faith congregations. L + M is discontinuing its operation of Safe Kids New London County, which provided parenting classes and child injury prevention programs, among the most popular being inspections to assure child car seats are used safely. If it can cobble together grant money, the non-profit Child & Family Agency of Southeastern Connecticut plans to take over operation of the Safe Kids program.
These outreach programs can keep people safe and healthy, the best outcome and always cheaper than treating illness. This is the dilemma. As state and federal governments face increasing pressure to slow the growth in health care costs, and so cut aid to hospitals, these hospitals will be hard pressed to continue wellness programs. Yet such programs are critical to controlling the cost of health care.
When the state legislature invoked the hospital provider tax in fiscal year 2011, it was sold as a means of allowing the state to tap more federal Medicaid matching money, with much of that revenue returned to the hospitals to keep them financially whole. But last session, in adopting the Malloy budget plan, the legislature kept the tax in place, but is phasing out the reimbursement. Hospitals also face Medicaid rate cuts and reduced state subsidies.
The Connecticut Hospital Association tabulates the collective revenue loss for Connecticut's hospitals at $549 million through 2015 - including a $20 million hit for The William W. Backus Hospital in Norwich, $18.5 million for L+M. Cuts in Medicare reimbursements due to sequestration add to the pressures.
Hospitals are responding with mergers, consolidations and other partnering to maximize efficiencies. But without a holistic approach to health care policy that fills the prevention gap and assures there are enough primary care physicians, access to quality care will at some point diminish.