Copyright 1999 Star Tribune
Star Tribune
(Minneapolis, MN)
July 31, 1999, Saturday, Metro Edition
SECTION: NEWS; Pg. 21A
LENGTH: 645 words
HEADLINE:
Washington's deep cuts to Medicare endanger Minnesota's hospital system
BYLINE: Joanelle Dyrstad; Mark Enger
BODY:
A business that suffers operating losses _
that takes in less money than the cost of the service it offers _ will be forced
to reduce or cut service essential to its customers. If hospitals were run like
any other business, administrators would now reduce home health and outpatient
services, emergency rooms and nursing home care due to Medicare payment cuts.
But in the health care business, community caregivers have a responsibility to
provide access to health care. Meeting this
responsibility is difficult. Many services are in jeopardy of being reduced
because the Balanced Budget Act of 1997 (BBA) drastically cut Medicare payments
for hospital-based outpatient services, home health and nursing home care.
According to a recent study by the Lewin
Group, the typical hospital will lose an average of 4 percent on each Medicare
patient by 2002. Nationwide this will amount to $71.2 billion
in government cuts to Medicare. Minnesota will be hit even harder, losing more
than 9 percent on each Medicare patient, or $801 million over
the five-year period.
To Minnesota's
hospitals, the impact will be tremendous. Nearly 40 percent of all revenue paid
to hospitals comes from the Medicare program. Many rural hospitals receive more
than 60 percent of their revenue from Medicare.
To underscore how the BBA will affect
vital health services across Minnesota, representatives of Fairview Health
Services and five other Minnesota hospitals and health care systems,
representing the Minnesota Hospital and Healthcare Partnership, told our stories
directly to Minnesota's senators and congressmen in Washington.
These cuts mean that Fairview will lose
$125 million in Medicare payments over the next five years.
These cuts will force us to further subsidize important services such as home
care, skilled nursing facilities and outpatient care with resources that support
other services.
In addition to BBA payment
cuts, teaching hospitals also face dramatic cuts to funding for graduate
medical education. This cannot continue for long. Without adequate
payments to hospitals, there will not be enough money for us to offer the health
care services our communities need, expect and deserve.
In January, the federal government
announced that the country enjoyed a budget surplus for the first time in years.
We hope that Washington didn't mean to slash important health care services in
Minnesota and across the country to gain the surplus. During a January press
conference, Sen. Rod Grams, R-Minn., noted that 34 of Minnesota's 143 hospitals
are suffering operating losses already; that's almost one out of four hospitals.
And of these 34 hospitals, 28 are small, rural hospitals.
In addition, 52 hospitals are dangerously
close to losing money on treating patients, with an operating margin under 2
percent. Because Medicare cuts are being phased in, the full effects of the BBA
have yet to be felt. How will Minnesota's hospitals, already struggling with
operating losses, handle additional cuts? And how many more hospitals will be
added to this list? Medicare payments must keep up with costs in order for
hospitals to survive.
Hospitals will be
forced to cut services as long as Medicare payments continue to dwindle.
Fairview Health Services is committed to offering the best care for our
communities. Without government action to provide adequate Medicare funding,
difficult decisions may need to be made.
Congress must act now to alleviate the
unintended consequences of the BBA. Medicare admirably gives millions of
Americans health care benefits; unfortunately, Washington's deep cuts are
threatening the very care they seek to protect.
.
_ Joanelle
Dyrstad, Fairview Red Wing Health Services, Red Wing, Minn., and Mark Enger,
Fairview Southdale Hospital, Edina.
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August 10, 1999 
