Protecting health care from state budget cuts by…cutting hospital budgets?

By: Steve Spires

When Gov. Bobby Jindal’s administration presented its mid-year budget cuts to the Joint Legislative Committee on the Budget last month, Commissioner of Administration Paul Rainwater assured lawmakers that neither Medicaid providers nor LSU hospitals were being affected.

Not so fast. Now it appears the LSU public hospitals , which provide critical safety-net care for the state’s poorest residents, will in fact have to cut  $29 million over the next six months, according to a story in the Baton Rouge Advocate.

How did this happen?

In a nutshell:  To help close the $251 million December shortfall, the administration replaced $50 million in state dollars it was planning to spend at the Department of Health & Hospitals with federal dollars through a change in what is called “means of financing.” Legislators were assured that this was simply the result of a smarter use of federal dollars and would protect state health-care services from cuts.

But when something sounds too good to be true, it often is. And in this case, it turns out the LSU public hospitals were counting on using the same federal dollars to pay for their own operations – something legislators weren’t told at the time.

Now the LSU hospitals – including small, rural hospitals that provide critical outpatient care to communities with few health-care options – are starting 2012 by deciding which employees to fire and which services to cut.

More than anything, this latest episode shows the need for new revenues to fund vital safety-net services. Instead of robbing Peter to pay Paul year after year, the state needs a long-term strategy for paying its health-care bills while ensuring that its neediest residents get the care they need. For years, we have been told that state agencies are doing “more with less.”

But the state’s public hospitals will be doing less with less after this latest round of cuts.

Unfortunately, there is little that can be done in the short term. The Legislature is constitutionally barred from considering any revenue measures when it meets this spring, when the Legislature is expected to face another billion-dollar shortfall.

And that means more of a cuts-only approach that harms education and health care.

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