HARRISBURG, Pa., April 29 /PRNewswire/ -- The Hospital & Healthsystem Association of Pennsylvania (HAP) today issued the following statement by President and CEO Carolyn F. Scanlan in response to “2004 Financial Analysis: General Acute Care Hospitals,” a new report by the Pennsylvania Health Care Cost Containment Council (PHC4), which covers the year ending June 30, 2004:
“This latest PHC4 report shows the ongoing harm to patients, communities, and the economy resulting from the continuing financial squeeze on Pennsylvania’s hospitals. “While total margins increased due to an improved investment climate, operating margins declined slightly and are at a weak 2 percent level, and uncompensated care provided by hospitals to patients lacking health insurance rose to $514 million. “As a backdrop to the state’s proposed 2005-2006 budget, this is ominous news for patients and hospitals. “The proposed budget targets Medicaid cuts for those hospitals that had an operating margin of 1 percent or higher - penalizing our most efficient health care providers and creating a disincentive for others. The proposed cuts will drive down virtually all hospital margins. “While the report cites significant growth in Medicaid revenue, that increase is mostly attributable to increased utilization and enrollment, not improved payment rates. Moreover, the proposed state budget assumes additional enrollment increases that will continue this pattern. “If the proposed state budget cuts had been in place in fiscal year 2004 - both the limits on hospitalizations and the direct cuts to hospitals - the operating margin for fiscal year 2004 would drop from 2.10 to 0.91. “As the PHC4 report says, ‘hospitals need to earn sufficient income to make improvements ... . These investments are necessary to replace worn out or obsolete buildings and equipment, keep pace with changes in medical technology, and meet ... changing health care needs ... .’ “The report also notes that ‘financial institutions and potential bondholders must be convinced that a hospital is capable of repaying its debt.’ Yet the arbitrary 1 percent margin threshold directly threatens the ability of hospitals to raise needed capital. “The proposed Medicaid budget eliminates $149 million in state funds and $167 million in federal matching funds for hospital payments and recipient benefits, for a combined impact of $316 million - including an anticipated increase in uncompensated care. When ripple effects on the state’s economy are factored in, the result is a staggering ‘community penalty’ of $757 million that will jeopardize access to hospital care for all Pennsylvanians. “The bottom line is that every dollar cut from state Medicaid spending costs the community $5.10. “This report comes on the heels of new HAP polling data showing that 7 of 10 Pennsylvanians consider Medicaid to be a necessary health care program that provides an important safety net, and a majority of those polled say that the state should make up any federal Medicaid cuts by continuing to fund hospitals and other providers at current levels. “It is clear that the public recognizes the value of this safety net health care program, and the important role hospitals play in delivering care to our most vulnerable citizens. “These public attitudes about Medicaid send an unmistakable message to policymakers: Restore the proposed funding cuts in the pending budget. “Our patients and the communities we serve cannot bear the burden of additional Medicaid cuts that hurt all patients and jeopardize the continued availability of the hospital care they depend on 24 hours a day, seven days a week. “We urge the Governor and the General Assembly to assure that Pennsylvania’s health care safety net is strong.”
HAP is a statewide membership services organization that advocates for nearly 250 Pennsylvania acute and specialty care, primary care, subacute care, long-term care, home health, and hospice providers, as well as the patients and communities they serve.
Additional information about HAP is available online at http://www.haponline.org/.
The Hospital & Healthsystem Association of Pennsylvania
CONTACT: Roger H. Baumgarten, Director, Media Relations, The Hospital &Healthsystem Association of Pennsylvania, Work: +1-717-561-5342, Cell:+1-717-329-9537, rbaumgarten@haponline.org
Web site: http://www.haponline.org/