Fairview Health Services will face the third largest cut among health care providers in the state as a result of Governor Pawlenty’s line-item veto of funding for the General Assistance Medical Care program, and more cuts will likely come in July.
When the cut is executed in the 2011 fiscal year, the brunt will be felt by hospitals and clinics, with Fairview losses at more than $27 million, as estimated in a Minnesota Hospital Association analysis.
General Assistance Medical Care offers uncapped coverage for childless adults, ages 21-64 that make below $7,800 a year.
Lisa Wilder , a health care spokesperson at the Department of Human Services said cutting the program means approximately 29,500 people will have to apply for MinnesotaCare or find some other way to pay their hospital bills.
Not all General Assistance Medical Care recipients are eligible for the state subsidized MinnesotaCare, which caps coverage at around $10,000.
Tom Pingatore, human services program manager at the General Assistance Medical Program said there will be negative consequences with the loss of the program.
“The problem is that the hospital is trying to collect and there is no one to collect from, so it gets chalked up as uncompensated care,” Pingatore said.
As the number of uninsured patients increases, so do hospitals’ uncompensated care amounts.
Mary Edwards , the vice president of public policy at Fairview Health Services, said Fairview has already felt the pressure of the acute economy.
“We have tightened our belts in every way we can possibly think of,” Edwards said.
She listed frozen salaries, lay-offs of almost 500 employees, removal of bonuses, delayed advancement of capital projects and changes to pension strategies as cost saving tactics already taken.
Mark Paller , assistant vice president of research at the University’s Academic Health Center , and a physician at Fairview, said the cuts will be a major problem for everyone.
“The clinical revenue of the clinical faculty of the Medical School as well as Fairview’s revenues as a health care facility are diminished,” Paller said.
On July 1, Pawlenty will begin to make unallotments to spending previously approved by the Legislature to close the $2.7 billion deficit remaining in the state budget.
“We are in this unknown window,” Edwards said. “We hope he does an inch deep and a mile wide of cuts … so we’re not sitting here taking a disproportionate share.”
Fairview’s current community contributions include $21.4 million to education and workforce development, and $2.3 million to research . Edwards said these donations are closely associated with the University.
She said this spending is unlikely to change, as education and research is at the core of Fairview’s mission.
However, if further cuts to funding occur, “we will have to start cutting programs,” Edwards said.
Edward Ehlinger , Director and Chief Health Officer of Boynton Health Services said the cuts affect the entire University population.
“The people on GAMC may not seek care that they need and it’s going to be devastating to them,” he said.
As more people avoid treating medical issues because of price, Ehlinger said it may result in increased emergency room situations, at a great cost economically and to patients’ health.
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