Hospitals need adequate state reimbursements

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Earlier this year, Gov. Tom Corbett proposed a state budget that provides “level funding” for hospital reimbursements, replaces lost federal Medicaid matching funds and tobacco settlement funds, and upholds the existing hospital Quality Care Assessment agreement. However, since then, significant shortfalls in state revenues ($569 million for this year and $778 million for next year) have put this budget proposal at risk.

I’m now very concerned that lawmakers may address these fiscal challenges by cutting funding for our hospital reimbursements, and I urge state lawmakers to protect hospital Medicaid payments as they consider how to address these budget gaps.

Hospitals have already endured a host of Medicare payment cuts from health reform, various fiscal cliff deals and sequestration, and during the next decade we will endure more Medicare cuts that are already in the pipeline.

Despite these challenges, I’m proud to say that we are doing the best we can with what we have. We are reinvesting in infrastructure and introducing new technology. We are transitioning to a new value-based, patient-centered care model. But any further payment cuts will threaten the progress we are achieving on improving quality and meeting the health care needs of our community.

Ohio Valley Hospital is not alone in this struggle. According to a recent analysis by the Pennsylvania Health Care Cost Containment Council, reported in the Post-Gazette May 20, half of the state’s general acute care hospitals had total margins below the 4 percent threshold considered the minimum needed for long-term financial stability. More than a dozen regional hospitals ended fiscal 2013 with costs exceeding revenues.

Community hospitals cannot afford for this trend to continue — and neither can the communities they serve. Hospitals are often among the largest — if not the largest — employers in the community. Every dollar spent directly by hospitals results in an additional $1.30 spent in other parts of the economy through spinoff investments, resource utilization and purchasing power.

Ohio Valley Hospital, for instance, employs more than 500 people. We spend more than $63 million per year, resulting in a ripple benefit of more than $70 million in our region’s economy.

Please give us the financial stability we need to continue this progress.

DAVID W. SCOTT
President and CEO
Ohio Valley General Hospital
Kennedy


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