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Rice staff weighs up potential impact of state cuts

WILLMAR -- Rice Memorial Hospital officials are still trying to assess what the loss of General Assistance Medical Care will cost the city-owned hospital.

"Certainly we'll feel the impact. There will be more people who are uninsured," said Mike Schramm, the hospital's chief executive.

General Assistance Medical Care, the state's publicly funded health program for the lowest of low-income people, is being eliminated on March 1 of next year through unallotment.

The Minnesota Hospital Association estimates that 40 of Minnesota's largest hospitals will lose a combined $200.9 million over 16 months once GAMC is gone. Hennepin County Medical Center, the state's largest public hospital, is projected to be hit the hardest, with a loss of up to $55 million.

Hospitals in St. Cloud, Duluth, Mankato and Rochester also are braced for a substantial impact.

Rice Memorial Hospital is 33rd on the list, with a projected revenue loss of around $769,000.

Rice officials aren't sure how accurate this Minnesota Hospital Association projection is, but Schramm figures the elimination of GAMC will, at the least, cost the hospital "several hundred thousand dollars" over the biennium.

GAMC has traditionally accounted for a relatively small percentage of Rice's patient volume. Many of these people, however, are among the most vulnerable -- extremely low income, usually single, and often with disabilities, mental illness or chronic diseases.

There's concern that once they're uninsured, they will no longer be able to receive ongoing care and will end up acutely ill in the emergency room and be unable to pay, Schramm said.

"We (already) have patients who come in that our staff see frequently for a variety of reasons," he said.

The cost of unpaid emergency care hasn't been estimated, but it likely will add even more to the overall cut that hospitals are being forced to take, Schramm said.

"We're still working on what we think the impact will be," he said.

Elsewhere, the brunt of the unallotments, announced last month by Gov. Tim Pawlenty, has been somewhat softened.

The state's medical education fund was exempt from cutbacks, as were Medical Assistance "disproportionate share" payments to hospitals. Disproportionate share hospitals receive higher Medicaid reimbursement than other hospitals because they treat a disproportionate share of Medicaid patients.

Although rates paid to specialists and certain other non-primary care services are being reduced by 1.5 percent, inpatient hospital services, primary care, mental health, dental and other critical services were excluded from additional rate cuts.

The original budget proposal was "pretty draconian," Schramm said. "There were a lot of things that were significant. ... We're thankful that the cuts were not worse."

He said hospital officials will continue to analyze the effects of the unallotment.

"What you don't know is the unintended consequences," he said.

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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