The economic impact

A new survey of Missouri’s hospitals finds that nearly 1,000 full-time equivalent positions have been reduced in the last six months, and a hiring freeze has been implemented for another 2,145 positions. The reductions are in response to federal funding cuts, high uncompensated care costs and changing utilization patterns.
Between 2013 and 2019, payments that Missouri hospitals receive from the federal government will be reduced by nearly $4 billion. Without Medicaid reform, the state’s hospitals will be left without the new revenue from expanding health insurance coverage to the uninsured and will continue to experience increased uncompensated care costs. Hospitals’ provision of charity care in 2012 was up 32 percent since 2010. The survey shows that hospitals are beginning to address the fiscal imbalance by reducing staff, delaying and canceling planned capital investments, and reducing service lines. Moreover, the cuts likely will become more pronounced later in the decade.

“So much of this debate has been about the philosophical dilemma over reforming Medicaid,” said Dan Mehan, Missouri Chamber president and CEO. “We are here today to demonstrate the very real dilemmas of inaction. We are talking about real workers who are losing their jobs. We are talking about real community hospitals that will be forced to reduce services or shut their doors. We are talking about real people suffering from heart attacks, strokes or other emergency medical conditions that will have to drive an hour and a half to the nearest hospital.”

Just fewer than half of the 84 hospitals responding to the survey had laid off staff members, for a total of 998 health care employees statewide. These include the layoffs at ConnectCare in St. Louis. More than half of the participating hospitals indicated they had implemented a hiring freeze. Among these 49 hospitals, 2,145 positions are either currently or prospectively affected by a hiring freeze.
The survey also included questions about plans for hospital capital investments. Although less than half of hospitals responded that they have canceled or delayed needed renovations or building repairs, the scope of the total lost investment is sizable. Of the 37 hospitals responding that they are delaying or canceling capital investments, 26 are from rural areas where the economic value of this investment is a significant local economic driver. Among all hospitals, the total in lost investment is conservatively estimated at more than $100 million

Maintaining local medical services — especially in small communities where hospitals are key to recruit and retain physicians — is essential to improving community health. However, some hospital service lines are profitable while others are not. Generally, hospitals balance the costs to maintain a robust service line offering. However, with the scope of the cuts that hospitals are facing and the uncertainty of a reduction in the uninsured, hospitals may have no choice but to limit the scope of the services they offer.

About Craig Thompson

I am a young professional with two great sons, and I work in the healthcare setting. I am employed in hospital administration and serve as Chief Operating Officer at Golden Valley Memorial Healthcare in Clinton, Missouri. These are challenging and exciting times in healthcare and my blog will focus on healthcare, raising boys or being raised by boys, and living in mid America.
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