Local healthcare industry providers have a message for the Alabama Legislature, which is tasked with managing the state’s more than $200 million general fund budget deficit: Medicaid cuts will not solve the financial crisis.
A second special session of the Legislature is slated to begin Tuesday and, with both the House and Senate having previously approved large Medicaid budget cuts, at one point ranging from $156 million to $36 million, respectively, during the first special session in August, healthcare providers and advocates say they’re worried about the future of indigent patient care. They're urging legislators to reconsider the validity of a proposition they say can only further catalyze the cycle of a broken system.
“It just disrupts the whole healthcare system if you don’t properly fund Medicaid,” said East Alabama Medical Center President and CEO Terry Andrus.
For every dollar the state spends on Medicaid, the federal government provides a triple match. So healthcare providers will lose significantly more money than just the state’s allocation if cuts to Medicaid are passed, Andrus said, which could devastate the state’s healthcare system if practices are forced to close or physicians opt to move out of state.
“Some people may say, ‘I don’t give a rip about Medicaid. That doesn’t apply to me.’ Well, in reality, it does,” he said. “Everywhere else in the state -- whether it’s Dothan or Opelika or Montgomery or Anniston -- a hospital like us is doing half or more of their deliveries under Medicaid. Then you go to pediatrics. Half of their patients are Medicaid patients. So, if you cut those doctors 15 to 25 percent, you’re hurting. If you’re saying, ‘Well, I’ve got insurance, so I don’t care,’ well you have to care because what do those doctors do? What if they don’t provide as many services?”
If doctors provide less service, that could mean more emergency room visits, Andrus said, which are much more costly than an average doctor’s office visit.
“So you’re looking at a pediatric clinic like with Dr. Smalley and them – they’re open 365 days, they’re open in the evenings, they’re open on weekends -- so they’re providing a great community service. If I don’t have the pediatric clinic open, they’re coming to my emergency room. It’s going to take time, and it’s going to be way costlier,” he said. “If you look particularly at smaller rural hospitals, you could have some hospital closures, and in communities you need a certain amount of healthcare.”
Pediatricians, OB/GYNs could be affected most
Dr. David Smalley of Pediatric Clinic LLC and Dr. William Golden of Lee Obstetrics & Gynecology manage the two local practices that could be affected most by losing Medicaid funding. Both doctors said approximately 50 percent of their patients are on Medicaid.
For Smalley, that includes about 12,000 children across Lee, Chambers, Russell, Macon, Bullock and Coosa counties.
“We see a lot of Medicaid children. We’ve always seen them. We still see them. It has been hard at times because of the state not funding things appropriately, because we just kind of run out of money and it gets to the end of the year, and we don’t get paid. We still see them, but I don’t know if we could do that at that volume year round,” he said. “A lot of times, a lot of our children, because of poverty, they tend to have more illness sometimes. It’s not their fault. It’s not their parents’ fault. These parents who have Medicaid insurance, they care just as much for their children as parents who have other types of insurance do. Mamas love their children, and daddies do, too. Their worry is, without Medicaid, where are they going to be able to go? It’s easy to blame people for their situations, but children, they have no say so in what situation they’re born into.”
Andrus said Lee County is fortunate when it comes to resources, so it’s unlikely that most services would come to a halt immediately if cuts were implemented. But long-term, it’s also unlikely that any hospital would be able to sustain itself without serious changes.
“With diminishing reimbursement, I don’t know. My doctors still want to get paid for doing the care. They have school loans and, you know, the average physician that comes out into practice now is $190,000 in debt. The average VCOM student is probably $250,000 in debt. That’s the average,” Golden said.
Providers say Regional Care Organizations would diminish
Another component of the proposed cuts that has the medical community in an uproar is the potential elimination of Regional Care Organizations (RCOs), which have been in the works to reform healthcare in every region of the state.
“Legitimately, the state government and the leaders were saying, ‘We’re concerned about the General Fund budget. Medicaid keeps increasing, so how do we deal with that?’ The governor had a commission that looked at it, and representatives from all sorts of constituents. Out of that, they passed the RCO. The purpose of that was to create these organizations that would be primarily led by providers that would really transfer the risk of the cost of the state Medicaid to these organizations, and so hopefully over time the goal would be to ... slow down the growth" of Medicaid costs.
"That was good legislation,” Andrus said. “So we’ve been working, really spending a lot of time and some money, developing this RCO. Well, if you don’t fund Medicaid properly, the RCOs will just go away and the likelihood that we’re going to come back after you’ve sort of said you wanted to reform healthcare and do it and then you don’t really fund it, you’re just kind of shooting yourself in the foot.”
Through the RCO program, Andrus said, EAMC manages patients from seven counties.
“It’s kind of frustrating. The Legislature kind of passed this new rule to come up with RCOs to try to better manage (Medicaid) and so I’ve been involved in that now for the last three years, and I’m encouraged that we’re going to be able to make an impact in a way to try to keep costs down. But we have to be funded to do that. We have to have people to see the patients,” said Smalley. “If you can’t be funded, doctors may not do that. Some will, probably, and some probably won’t. That’s not a threat, that’s just the way things are. So, then, where do the children go? They wait till they’re really bad sick and you may have prevented it from getting to that point, and then costs are generated that way.”
Costs won’t disappear
It is also crucial legislators understand that just because Medicaid may no longer be fully funded by the state, that doesn’t mean the costs will disappear, Andrus said.
“In our local community, if you think, if a pregnant woman walks in today, they’re going to get the same level of care as the richest person in the community who has the best Blue Cross-Blue Shield. Everybody is going to get the same level of care, and that’s the right thing to do. You don’t want a multi-tiered health system where if you’re poor, you get less.”
According to Golden, the bottom line is that care will still be delivered, and that care isn’t free.
“Just because Medicaid says they can’t fund us anymore doesn’t mean the care isn’t being delivered,” he said. “So it’s not like it’s going to magically go away if they quit funding it. I don’t suspect that a single person won’t get pregnant because, ‘Oh, I can’t get on Medicaid.’”
Locals say new revenue is likely the solution
The state of Alabama’s General Fund budget is in a bit of a “conundrum,” as Andrus puts it, but there are options for generating new revenues, many of which healthcare providers suggest the Legislature consider before cutting funds to other programs.
Cigarette taxes, soda taxes and gasoline taxes are but a few that have been publicly discussed in the political arena that local providers implied might be worth taking a look at.
“The hospital association has proposed looking at cigarette taxes,” Andrus said. “Tobacco taxes are particularly good because it’s two things: one, you’re going to get some tax money, and number two, you may discourage somebody from smoking, which negatively impacts the healthcare system because they’re going to cost the system more long-term.”
Golden said that while fixing the system won’t be easy, there has to be a way that doesn’t involve cutting Medicaid funding.
“There is obviously no simple way of how do you take care of your indigent,” he said. “There could be some alternative, creative ways to do it.”
Smalley said the Legislature has to find a way to bring in new money.
“The system wont work if we just try to let it stay as it is,” said Smalley. “I think some states have talked about a cigarette tax, and there’s a soft drink tax. There’s all these different taxes that have been put up before the Legislature. I think there’s ways to do it out there. I think there’s a real crisis in this state in regard to healthcare and the Medicaid population, if the Legislature doesn’t fully fund it, and again they have to fully fund it for the RCOs to go forward.”