Federal cuts worry Dan River Region hospitals

As lawmakers work to reach a deal to raise the nation’s debt ceiling limit, local hospitals grow wary of cuts to Medicare and Medicaid.

That matters for Danville Regional Medical Center, where 75 percent of patients use those insurance programs, said DRMC CEO Eric Deaton. Sixty percent of patients are on Medicare and 15 percent are on Medicaid.

Currently, the hospital only gets reimbursed 60 percent of the cost of care for Medicaid patients, and more cuts are coming from health care reform. Further cuts could mean offering fewer services, like free health screenings or event sponsorships, in Danville.

“It directly impacts what we can do in our community,” Deaton said. “… Our economy’s so fragile, especially in Southside Virginia today, you start taking money away from the second-largest employer, and it impacts jobs as well.”

The hospital would like to keep all the new staff it hired in the past year. Additionally, a Medicare program also pays a portion of the new residency program aimed at training doctors in the region.

Deaton already notified the region’s representatives of the hospital’s worry.

“I think everything is on the table right now with keeping the debt ceiling lower,” Deaton said. “We’re concerned.”

The Virginia Hospital and Healthcare Association knows the country needs to get “its fiscal house in order” and agreed health care spending has to be addressed, said VHHA Senior Vice President Chris Bailey.

“Simply ratcheting back provider payments, which are already below the cost of treatment, is not a sustainable strategy in our opinion,” Bailey said.

Morehead Memorial Hospital estimates it could lose $1.1 million a year based on legislators’ proposals for cuts and caps as Medicare and Medicaid payments account for 65.5 percent of the hospital’s revenue, according to a news release.

The downturn in the economy already forced the largest employer in Eden, N.C., to cut back. Further cuts would affect services.

“Some services may disappear, not just for Medicare and Medicaid patients, but also for everyone,” said MMH President and CEO W. Carl Martin in a statement. “Jobs may be lost and the local economy will suffer.”

The North Carolina Hospital Association estimates proposed cuts could cost North Carolina hospitals $670 million annually, said Don Dalton, association spokesman. About $314 million of that is based on proposed talks to eliminate provider taxes, which North Carolina uses to meet its Medicaid match. The federal government provides $2 for every dollar the state spends on Medicaid.

Virginia does not have provider taxes.

More cuts could undermine Medicaid at a time when health care reform will add more people to the program, he added. Hospitals can’t withstand continual cuts, which would make it more difficult to offer services that lose money, like emergency departments and obstetrics units, Dalton said.

“People should be paying attention because this decision will impact the care of everyone in the community going forward,” Dalton said. “For some hospitals, it could easily be a life and death issue.”