Less than a month ago, Georgia's cash-strapped health care providers breathed a collective sigh of relief upon learning that the new federal stimulus package would infuse $1.7 billion into Georgia's ailing Medicaid system.
Today, those same providers are staring down the barrel of a $431 million cut in Medicaid payments. How does this happen? Gov. Perdue's recent budget proposal recommends just that.
Georgia is in the midst of a serious budget crisis and all stakeholders are aware of the need to share in the pain of budget cuts. But when the federal government provides more than enough money to prop up Georgia Medicaid and health care providers are still slapped with a 10 percent rate reduction, that's a shocking blow that has the potential to put some hospitals, physicians and health care providers out of business.
So where does the governor want to spend the federal Medicaid money?
While nobody really knows at this point, what we do know is that it won't be going to Georgia's already fragile health care system. The real losers if this budget passes? Every Georgia citizen, business and local government that will see health care costs continue to increase and access to care shrink.
In Georgia, for every dollar hospitals spend caring for a Medicaid patient admitted to the hospital, the state pays, on average, 84 cents. In fact, hospitals haven't had a Medicaid rate increase since 2002. For physicians and other health care providers, the picture is just as bleak. Not only have they not seen a rate increase in eight years, they are being paid roughly 30 percent less for a Medicaid patient than for the same service provided to a Medicare patient. You don't have to be an economist to know that long term, this math doesn't work.
Health care providers would love to see every penny of the new Medicaid stimulus dollars being put into the state's Medicaid program as was intended.
But they realize, that in this current budget crisis, that's not realistic. That's why we're not asking state budget writers in the Georgia General Assembly for a Medicaid rate increase — although there's enough new federal dollars to justify it — we're urging them to avoid the proposed Medicaid cuts that will have a devastating impact on health care providers and, ultimately, everyone else.
While the federal government gives Georgia about $684 million in new Medicaid funding in FY 2010, Gov. Perdue's budget for the same year calls for an $81 million cut to Georgia hospitals. And because the federal government contributes roughly two dollars for every dollar the state spends, that's really a $234 million cut. For physicians and other providers, the governor's $69 million in proposed cuts balloons to about $197 million with the federal match. That's more than $281 million in federal matching funds that would be redirected away from Georgia's economy and sent to other states.
In this troubled economy, the health care sector is one field that is still producing jobs while safeguarding the health of all Georgia families. But if Gov. Perdue's budget cuts are adopted, hundreds of millions of dollars that could be used to create jobs and provide necessary health care services will be gone. Furthermore, some Georgia hospitals will potentially close and physicians — including obstetricians, family physicians, pediatricians, dentists and other health care providers — will have no choice but to quit treating Medicaid patients.
The new federal dollars were intended to keep Georgia's health care system from sinking. But if the governor's plan is passed, there won't be enough life rafts to go around.
As the state finalizes the 2010 budget, contact your state representative and senator today. Tell them to reject Gov. Perdue's proposed cuts and to use the new federal dollars for the purpose for which they were intended.
Joseph A. Parker is the president and CEO of the Georgia Hospital Association and a member of the ACCESS Healthcare Coalition. The ACCESS Healthcare Coalition, founded in October 2007, is a diverse partnership of Georgia businesses, local governments, hospitals, physicians, dentists, nursing homes, pharmacists and consumers. Its purpose is to preserve access to health care for all Georgians by ensuring fair and reasonable Medicaid payments to Georgia's health care providers.