Funding for rural health in North Dakota is already disadvantaged. The federal government's proposed cuts make it worse.
But to pour salt on an open wound, the federal government is also proposing cuts to the Medicare and Medicaid programs.
"(The budget) includes some cuts they're going to propose to Medicare and Medicaid over the next five years," Southwest Healthcare Services Administrator Darrold Bertsch said. "We all know how important health care is for the aging population. If we're faced with more cuts, that's less money for us to do the things we need to do."
According to a press release from the Center for Rural Health at the University of North Dakota, the proposed budget includes $78.6 billion in legislative cuts to Medicare and Medicaid for five years. Further, when other regulatory changes are included, the cuts reach $102 billion nationwide.
The American Hospital Association broke those figures down to show the impact of Medicare just at St. Joseph's Hospital and Health Center in Dickinson.
ADVERTISEMENT
"They're already not covering our cost and then they're going to turn around and cut the market basket updates, which is the inflationary increases on top of that," said Krystal Claymore, chief financial officer at St. Joe's.
The reduction in the Medicare market basket update of inpatient care impacts the hospital to the tune of $720,000 during a five-year period, and for outpatient care it's $441,000, according to the American Hospital Association. That total is about $1.2 million lost to the hospital.
"Over 50 percent of our population is Medicare; we have a lot of elderly people," Claymore said. "The Medicare reimbursement we receive in rural North Dakota doesn't even cover our costs for these patients."
The lesser payments aren't just a regional problem.
"We've had an ongoing difficulty with the way Medicare pays in North Dakota for the same kind of services as they pay in other locations," said Chip Thomas, president of the North Dakota Healthcare Association. "They pay better elsewhere than in North Dakota; that's obviously of concern."
Jim Cooper, president and chief executive officer of Medcenter One, said the proposed Medicare impacts would be felt nationwide, but more so in rural areas.
"I think the impact is going to be felt more here; because of our rural nature, some of our providers are out there and may not have as high a volume as other places because we simply don't have the population," Cooper said.
Claymore said while Medicaid is managed by the state, the federal government dictates the overall amount each state gets.
ADVERTISEMENT
"The federal funding for five years for Medicaid, they're proposing a $3.87 billion reduction," Claymore said. "How that will affect us, we don't know, because the types of reductions that they are proposing primarily limit payments to public hospitals."
St. Joe's is not a public hospital so it might not impact its operations as much. However, Claymore said it would have an impact on other hospitals throughout the state.
Claymore isn't just concerned with this year's proposed cuts, because there is a provision left over from last year that could still potentially impact the hospital.
Claymore said the federal government did an arbitrary geographical re-classification of the wage index, which lowered the estimates that Medicare provides on wages paid in rural hospitals.
"They didn't really do a full-blown study to say and verify for a fact that we really pay lower wages in rural hospitals, which in our case we really don't; we, in fact, have to pay more because our competition is Bismarck," Claymore said.
Claymore said with the help of the Congressional delegation, the federal government stayed the re-classification until October 2007. If the re-classification doesn't get stayed again, that will mean further cuts to Medicare for the region.
Claymore said the impact on that would be an additional $400,000.
"We're already not covering our cost for providing services to the elderly," Claymore said. "This could have a major impact on our ability to continue to provide services in the community."
