In the grand scheme, the line-item veto of supplemental funds for a few dozen Pennsylvania hospitals last month by Gov. Tom Wolf does not carry the weight, and certainly did not garner the attention, that education funding or pension reform has in the ongoing state budget impasse.
But hospital association executives say the cuts come awfully close to the muscle and bones of hospital operations.
In all, the cuts to hospitals amount to $17.5 million in state funding, which would trigger another $18.5 million in federal match funds.
The $36 million total would go to six statewide burn care centers, 66 hospitals with obstetrics and neonatal services, and 13 “critical access” hospitals in rural counties. As just one example, West Penn Hospital’s burn center in Bloomfield, where 36 percent of the patients treated are on medical assistance, would receive $1.2 million if the funds are restored.
Yet there’s no guarantee that will happen, especially because the cuts were also included in Mr. Wolf’s proposed budget a year ago.
“Personally, I am having a hard time understanding why the governor has zeroed out funding for the most vulnerable, at-risk patient populations we serve,” said A.J. Harper, president of the Hospital Council of Western Pennsylvania.
Asked about the cuts, Jeffrey Sheridan, press secretary for Mr. Wolf, pointed to the “irresponsible” budget sent to the governor by the Republican-majority Legislature “that was unbalanced by $500 million, would have grown the already multimillion-dollar deficit and made a $95 million cut to education.
“The governor used his line-item veto power to ensure it was in balance because, once again, the Republican Legislature failed the people of Pennsylvania.”
Paula Bussard, chief strategy officer for the Hospital and Healthsystem Association of Pennsylvania, said the supplemental payments support services and hospitals that tend to treat a high percentage of patients on medical assistance.
The Legislature established the payments between 10 and 15 years ago, she said, as a way to help with costs incurred by the hospitals that medical assistance doesn’t cover.
“When you cut these supplemental payments, you really create a financial gap for the hospitals that receive these payments and these hospitals are needed to serve Medicaid patients,” she said.
Ms. Bussard said that although the amounts typically represent less than 5 percent of a hospital’s revenue, “It can be the difference between breaking even or having a slight positive margin, or having a negative margin.”
Most vulnerable are the 13 “critical access care” hospitals that may see wide fluctuations in their patient census.
Four hospitals in the western third of the state have that designation: Meyersdale Medical Center in Somerset County; Penn Highlands Brookville Hospital in Jefferson County; Titusville Area Hospital in Crawford County; and Corry Memorial Hospital in Erie County.
Of the four, the most recent financial report by the independent Pennsylvania Health Care Cost Containment Council showed only Meyersdale was in positive territory with a 9.09 percent operating margin in fiscal 2014.
Corry’s operating margin was negative 5.66 percent, Penn Highlands Brookville was negative 5.97 percent and Titusville was at negative 20.3 percent.
Ms. Bussard also noted that affected hospitals fall along the continuum of sizes — from burn centers at major metropolitan centers such as West Penn Hospital in Bloomfield and UPMC Mercy Hospital in Uptown to facilities large and in between with obstetrics and neonatal units.
“This doesn’t just impact medical assistance patients. They [the hospitals] care for all patients. If you’re struggling to keep an obstetrics unit open, it isn’t just for medical assistance patients.”
Steve Twedt: stwedt@post-gazette.com or 412-263-1963.
First Published: January 14, 2016, 5:00 a.m.
