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'Tremendous' financial risk in joining new GAMC system, Rice CEO says

WILLMAR -- Rice Memorial Hospital hasn't decided yet whether to join the care coordination delivery system that's being formed for Minnesota's newly retooled General Assistance Medical Care program.

Hospital officials are looking at the financial projections, however, and have grave reservations.

"Based on what we know, the financial risk for us would be tremendous," Mike Schramm, chief executive of Rice Hospital, said this week.

He said it's "probably unlikely" Rice would participate.

GAMC, Minnesota's publicly funded health program for single adults, was slated to end last month.

Under a last-minute reprieve, the program, whose enrollees are very low-income, has been extended until the end of May, after which it will be restructured.

State officials have proposed a network of care organizations, primarily hospitals, which would be responsible for coordinating the care of these patients. The state has allocated $60 million for the hospitals and another $11 million for prescription drugs.

Seventeen hospitals, including Rice, are on the list of hospitals being asked to consider participating in the program.

A decision must be made soon, Schramm said. June 1 has been set as the date for GAMC recipients to start enrolling in the newly restructured program.

Rice officials had a conference call this past Tuesday with the Minnesota Department of Human Services to learn more about the new GAMC structure will work, but there's still considerable uncertainty, Schramm said.

"There really are a lot more questions than answers," he said.

One of the major issues for Rice Hospital is how many GAMC enrollees it might expect to have. Kandiyohi County has about 360 residents on GAMC, but this number could climb if Rice becomes the care organization for GAMC recipients in surrounding counties as well.

The cost of care also is unpredictable. Although Rice could subcontract for non-hospital services such as primary care, it would still have all the fiscal responsibility. It's not clear how far the $60 million pool will extend, and the transfer of a critically ill or injured GAMC patient to a larger tertiary hospital could have expensive consequences for Rice, Schramm said.

"It wouldn't take many of those to break the bank," he said.

"The risk is just unbelievable for the small amount of money," agreed Bill Fenske, chief financial officer at Rice.

Even if Rice doesn't become part of the GAMC care coordination delivery system, it will continue to see GAMC patients for emergency care, he and Schramm said.

It's also possible the hospital could join the system at some future point, if the finances become more favorable.

Anne Polta

Anne Polta covers health care, business/economic development and general assignment. Her HealthBeat blog can be found at Follow her on Twitter at @AnnePolta.

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