Missouri Hospitals Fear Job Losses, Service Cuts Without Medicaid Expansion

Mar 26, 2014
Originally published on March 26, 2014 4:32 pm

(Updated 4:30 p.m. Wed., March 26)

In the last six months alone, Missouri hospitals have eliminated nearly 1,000 jobs, imposed hiring freezes affecting another 2,145 positions and cut or delayed at least $50 million in building projects.

The blame is due, in part, to the General Assembly’s refusal to expand Medicaid.

At least that’s the opinion of the Missouri Hospital Association and the Missouri Chamber of Commerce. On Wednesday, they released the results of their survey of hospitals around the state. The survey found job cuts, canceled construction projects and likely service reductions.

Later Wednesday, Missouri Gov. Jay Nixon added his pro-expansion voice to the debate. “This independent report lays out in stark detail how Missouri communities are already suffering the consequences of the legislature’s failure to act on Medicaid,” he said. “Fortunately, there is a clear path – and plenty of time left in the session – for the General Assembly to prevent further damage to our economy and put the needs of Missouri families first. By expanding and reforming Medicaid, we can reverse these harmful job cuts, stop the flow of Missourians’ tax dollars to other states and bring affordable health coverage to hard-working Missouri families. Missourians deserve action now. It’s time to move forward.” 

The two groups made no secret that their news was part of a last-ditch effort to persuade legislators – mostly Republicans -- to change their minds and expand the state’s Medicaid program to the roughly 300,000 low-income residents who would qualify. 

The money from the expansion would go directly to hospitals and medical personnel. More importantly, it would replace the federal payments that currently go to the hospitals to cover the costs of caring for uninsured people, many of whom would be covered by expanding Medicaid. Those payments are being phased out.

However, the word “expansion’’ wasn’t used in the two groups’ announcements or in interviews. Rather, they prefer the word "reform."

“Without Medicaid reform,” their statement said, “the state’s hospitals will be left without the new revenue from expanding health insurance coverage to the uninsured, while continuing to experience increased uncompensated care costs."

“So much of this debate has been about the philosophical dilemma over reforming Medicaid,” said Dan Mehan, Missouri Chamber president and chief executive.  “We are here today to demonstrate the very real dilemmas of inaction. We are talking about real workers who are losing their jobs. We are talking about real community hospitals that will be forced to reduce services or shut their doors.  We are talking about real people suffering from heart attacks or strokes or other emergency medical conditions that will kill them if they have to drive an hour and a half to the nearest hospital.”

“Medicaid reform matters,” said Herb B. Kuhn, president and chief executive of the Missouri Hospital Association. “Without it, financial constraints will continue to limit hospitals’ ability to deliver services to Missouri communities and support local economies. What this data demonstrate is that the damage is already occurring.”

Later, in an interview, both men said that they were not dissuaded by disparaging comments from legislators in both chambers and the House's action to keep Medicaid expansion out of the budget for the fiscal year that begins July 1.

"We've got a lot of clock left on this session,'' Mehan said.

What legislators needed to understand, he continued, is that "the demand for health care is going up.''  Missouri's failure to address that demand can hurt the state economically and make it less attractive to business and industry.

Kuhn said he couldn't underestimate the problems facing rural hospitals, and "the alarming trend'' already underway, in which health-care cuts are leading to "medical deserts'' in parts of the state.

Survey found about half of hospitals to be financially troubled

The survey involved 84 hospitals.  Fewer than half had laid off workers, but the lost jobs totaled 998 health-care employees.  Hiring freezes at 49 hospitals affected 2,145 positions, the survey said.

Thirty-seven of the hospitals – 26 of them in rural Missouri -- reported that they had “canceled or delayed needed renovations or building repairs,” the two groups said, adding that the scope of the investments totaled up to $100 million.

“Eliminating as much as $100 million from building improvement projects will also negatively impact our economy,” Mehan said.  “It will stifle opportunities to provide health care most efficiently and effectively in Missouri.  Instead, we will send our tax dollars to other states to improve their health-care systems.”

The survey determined that cuts in jobs and investments were due, in part, to cuts in federal funding, higher numbers of uninsured patients and “changing utilization patterns.”

In just two years, from 2010 to 2012, the hospitals reported that their “charity care’’ for uninsured had shot up 32 percent.

The survey also found that by 2019, the federal payments to cover uninsured poor patients “will be reduced by nearly $4 billion.”

Mehan also laid out the choices that legislators have made by not expanding Medicaid -- and the challenges faced as a result. “Missourians are already sending their tax dollars to Washington, D.C. to fund Obamacare. By not acting to reform our Medicaid system in Missouri, our tax dollars are simply being diverted to other states," he said. "We think they should come back to Missouri where we can expand coverage to 300,000 working Missourians and boost our economy by the tune of $2 billion each year.”

The chamber said that failing to expand Medicaid will "also continue to compromise Missouri’s network of rural hospitals. In many parts of the state, Missourians already have to cross a county line to access a hospital. Without Medicaid reform, the added financial pressures placed on providers will likely force more rural hospitals to close or reduce services, creating health care deserts in rural Missouri. Reform is needed soon to protect these hospitals, which are vital employers and health-care providers for many Missouri communities."

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