Hospitals in different regions react to Medicaid cuts

For Indiana hospitals, Medicaid rates have long lagged behind other types of payers - with no increase since 1993 - but after a year of deep recessions and state budget cuts, those hospitals are now looking at a five percent cut, The (Fort Wayne) Journal Gazette reports. Reactions to the cuts among hospitals varied. One executive said his hospital wouldn't cut any staff positions but would instead "redouble our efforts" at controlling costs. Another said, "We're already essentially donating the care to Medicaid patients, anyway," and that his hospital would "get over" the reduction (Slater, 1/3).

In Seattle, meanwhile, lowered Medicaid reimbursements have contributed to the decision by the region's only pediatric hospital, Seattle Children's, to close an afterhours clinic, the Seattle Times reports. "Half its patient care is reimbursed by Medicaid, and large budget cuts from the state loom for the next two years." However, other changes - such as a trend among office-based pediatricians to offer evening hours - have also contributed to the closure, a hospital executive said (Ostrom, 1/3).

In the Richmond, Va., area, hospital capacity has been shrinking since the mid-1990s, when there were 4.8 beds per 100,000 people, compared with three beds per 100,000 people now, BNET reports in a blog post. Despite that reduction, the area's quality scores in key areas have remained high and costs have risen more slowly than the national average. Reports on other regions suggest hospital systems have found ways to cut costs without reducing the quality of their care (Terry, 1/2).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.