Officials with the Iowa Hospital Association say Iowa hospitals stand to lose more than 18-million dollars under a budget-cutting proposal submitted to Governor Culver this week. The director of the Department of Human Services proposes a five percent reduction in payments to doctors, hospitals and others that provide care to patients who are on Medicaid.
Scott McIntyre of the Iowa Hospital Association says, “I can’t exactly say that we were surprised. I mean, Medicaid is a major part of the state’s budget and it’s always a big target. But it is unfortunate because we believe the state has the ability to not have to do that, that the funds are available to do cover that and not have to make that cut.”
In order to avoid more layoffs of social workers and other workers in the Department of Human Services, the agency’s director chose to shift some of the surplus of money set aside for Medicaid, which is government-financed health care for the poor and disabled. McIntyre says by taking that money out of Medicaid, hospitals are being squeezed when they’re already under financial pressure because of low federal reimbursement rates for the case of elderly patients who’re on Medicare.
“It makes it harder for hospitals to pay employees more. It makes it harder for us to raise nurses salaries which, again, a lot of people know are among the lowest in the nation,” McIntyre says. “It adds to that problem and frankly, we don’t need it anymore. We need to bring Medicaid and Medicare up, not go the other direction.”
The Iowa Hospital Association estimates Iowa hospitals will be short more than $170 million this year because Medicaid payments fail to cover the cost of care for seniors. There are 117 community hospitals in Iowa.