GM bankruptcy, Medicaid cuts slam Michigan providers

Hospitals and doctors are already being hit hard by the recession, with patients losing their jobs and health insurance coverage far too often. In Michigan, that effect has been intensified with the bankruptcy filing of General Motors, which has been a mainstay employer--in tandem with a new round of cuts to the state's Medicaid reimbursement levels. Now, hospitals in particular are struggling find new savings that will offset a new round of potential losses, administrators say.

Given the variables, there's no hard-and-fast number as to how much of the state's hospital revenue could be impacted by GM. But Jack Weiner, the CEO of Pontiac's St. Joseph Mercy Oakland Hospital estimates that 7 to 9 percent of his budget comes from services to autoworkers. That number is being eroded, however, with the hospital seeing more emergency department visits and more requests for free care instead.

Warren, MI-based St. John Health System, which lost $106 million for the last six months of 2008, has already cut costs more than $1 million by making a variety of cuts, large and small, including moving lawns less often, eliminating under-used cell phones, pagers and other telecom devices and cutting down on vendors repairing endoscopy equipment. But if it's hit as hard as St. Joseph could be, that may turn out to be a drop in the bucket.

Other hospitals across the state, especially in the Detroit area, are expecting similar problems, and beginning to take proactive steps such as demanding co-payments up front to increase cash flow.

To learn more about these issues:
- read this Detroit Free Press piece

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