Health care braces for big cuts

Hospital and health care officials in the greater metropolitan region are anxiously awaiting recommendations due this week from the Medicaid Redesign Team charged by New York”™s governor with saving $2.85 billion in state Medicaid spending in the 2011 fiscal year while improving the program”™s quality and efficiency.

Gov. Andrew Cuomo already has drawn fire from allied hospitals in the Hudson Valley region and statewide for his proposed health care spending cuts in a 2011 executive budget that would slash $982 million, or about 2 percent, from New York”™s total Medicaid spending. The governor further charged his appointed Medicaid Redesign Team with cutting an additional $4.6 billion in state Medicaid spending in 2012-13.

Including federal matching funds, that two-year round of Medicaid cuts amounts to approximately $15 billion, said Daniel Sisto, president of the Healthcare Association of New York State, which represents more than 550 nonprofit and public hospitals, nursing homes, home care agencies and other health care organizations.

Sisto, who serves on the redesign team, in a statement said that is “the largest cut to health care services in New York state”™s history. Even within the context of our fiscal crisis, the magnitude of these cuts is extreme.”

Kevin Dahill, president and CEO of the 24-member Nassau-Suffolk Hospital Council and Northern Metropolitan Hospital Association (Normet), which represents 30 hospitals in the Hudson Valley region, in a written statement called the extremity of the cuts “truly disheartening,” especially since the health care industry “has borne a disproportionately large share of the sacrifice needed to correct the state”™s fiscal problems these past few years.”

Dahill has met individually with state legislators on behalf of the Suburban Hospital Alliance, the advocacy arm of the Long Island and Hudson Valley hospital groups. Legislators are taking a “wait and see” approach to Cuomo”™s proposed health care cuts before the redesign team issues its recommendations, he said. That report is due on March 1.

Dahill in a phone interview said the governor”™s ordered savings could result in as much as $750 million in cuts for all providers of Medicaid-funded care on Long Island and about $700 million in cuts for providers reimbursed by Medicaid in Normet”™s seven-county region. Those estimates are based on the percentage shares of state Medicaid spending allocated to the Long Island and Hudson Valley, he said.

“In the end, those who will suffer the most from such massive funding reductions are the patients ”“ our friends, neighbors, and family members ”“ who will see hospital-based programs and services eliminated, emergency room wait times grow much longer, and in some cases, the neighborhood hospital close its doors to the community forever,” Dahill wrote in response to the governor”™s proposal. “The suburban communities served by the hospitals from the Long Island region and the Hudson Valley region deserve access to the highest-quality care.”

In a statement from the HANYS office in Albany, Sisto said he was “gravely concerned” about the expectations for Medicaid reforms by the governor”™s redesign team “to substitute for this level of reduction.” To accomplish that, the team “does not need more health experts,” he said. “It will require alchemists, not policy wonks or providers, to transform cuts of this magnitude into gold.”

Sisto pointed out the health care sector has felt the greatest impact from state budget cuts in recent years. In the last three years, providers have been cut by a cumulative $5.3 billion in the Medicaid program. Under the federal Patient Protection and Affordable Care Act, New York is slated for billions more in Medicare payment cuts even while expanded Medicaid enrollment resulting from the federal reform measures and the recession drive up demand for Medicaid services from providers.

After the health care reform law was narrowly passed by Congress in 2010, James Foy, then-CEO of St. John”™s Riverside Hospital in Yonkers, said St. John”™s stood to lose $7 million a year when the Medicare reimbursement cuts begin in 2014. He said the federal reform bill was “a significant negative” for St. John”™s and several other hospitals in Westchester County.

“If the proposed additional $15 billion in Medicaid reductions over the next two years becomes law,” said Sisto, “we will see a continuation of hospital and nursing (home) closures, adding to the 30 hospitals and more than 50 nursing homes that have already been shuttered in the last decade.”