VA Hospitals Lament Limited Health Care Expansion
RICHMOND, Va. With an expansion of Medicaid in Virginia all but pronounced dead, the state’s hospitals and health care systems are bracing for tough decisions on how to balance their budgets.Lawmakers are holding a special legislative session on the topic starting Thursday, but there’s been no sign that Republican opposition to Medicaid expansion has wavered. And Democratic Gov. Terry McAuliffe has conceded that he lacks the executive power to expand the federally funded program on his own.
Not adding 400,000 low-income adults to the ranks of Virginia’s insured has now left the state’s health care industry with some painful decisions.
“Any business has to have a balance of revenue and expenses if they want to keep going,” said Katherine Webb, spokeswoman for the Virginia Hospital & Healthcare Association. “These are just really challenging times.”
In addition to other federal cuts and more expected, the association says not expanding coverage means health care providers are forgoing more than $218 million in revenue next year, a number that doubles to more than $437 million in 2016. To date, hospitals have stopped services like delivering babies, have consolidated operations, laid off staff or left positions unfilled.
Centra, a Lynchburg-based non-profit health care system with four hospitals and nearly 40 facilities in central and southern Virginia, already has laid off about 150 employees and cut hours for others, said CEO E.W. Tibbs Jr.
“There are hospitals that have closed, there are hospitals that are struggling and we’re headed in a difficult way,” Tibbs said of the state’s health care industry.
Under the Affordable Care Act, states decide whether to expand Medicaid, with the federal government promising to pick up most of the cost.
The state’s hospitals in the legislative session pushed aggressively for expansion, saying it is needed to help cover the cost of the care already being provided to the state’s poor. But most Republican lawmakers opposed it, saying they don’t believe the federal government will be able to keep its promise to pay and the state can’t afford a large scale increase of an entitlement program.
While legislative leaders understand the importance of hospitals to Virginia communities, Matthew Moran, spokesman for House Speaker William J. Howell, said expanding Medicaid is “just too big a risk to taxpayers.”
Absent a more robust expansion, McAuliffe unveiled an alternative plan aimed at encouraging adults and children already eligible for publicly subsidized health care coverage to enroll in various programs. The state and the federal government would each pay about $80 million a year to cover the costs of new coverage for 20,000 uninsured residents with a severe mental illness.
How the industry reconciles the loss in revenue from Medicaid expansion could have lasting impacts on both rural and urban communities.
Virginia’s hospitals and health systems contributed $34.8 billion to the economy and accounted for $200 million in state and local taxes in 2012, according to an industry report issued this month. The report also says that in 60 percent of Virginia cities and counties, hospitals and health systems are among the top five and directly and indirectly supported more than 913,600 jobs.
But a Thomas Jefferson Institute for Public Policy report this month questioned the severity of the financial health of Virginia’s hospitals in 2012, showing profits topping $1.5 billion and nearly $15 billion in net worth.
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