Hospitals brace for more than $600M in safety-net cuts

Hospitals and low-income patients in California and Washington state are bracing for significant funding cuts to their healthcare programs, report the Los Angeles Times and AHA News Now.

In California, the Obama Administration recently approved a 10 percent overall cut in Medicaid payments to providers, including hospitals, nursing homes, physicians, and dentists. The request for the reduction was made by the Department of Health Care Services, which oversees the Medicaid program, known as Medi-Cal. It is expected to lead to savings of $623 million a year, notes the LA Times.

Jim Lott, executive vice president of the Hospital Association of Southern California, told Fierce HealthFinance the reductions virtually eliminate any positive margins acute-care facilities have for treating patients. "This was a cut against the 2008 rates for Medi-Cal," Lott said, adding that in some instances that makes the reductions as high as 25 percent.

The healthcare cuts in Washington proposed by Gov. Christine Gregoire are even steeper: at least $664 million, part of an effort to close a $2 billion deficit. Rural hospitals are facing Medicaid cuts as high as 50 percent, according to AHA News Now.

"Safety net and trauma hospitals will be cut deeply and will have a difficult time delivering the full scope of services they do today," the Washington State Hospital Association said in a statement. "These cuts undermine our healthcare system and will be felt for years to come."

To learn more:
- read the Los Angeles Times article
- read the AHA News Now article