Arkansas - Digital Publishing
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Arkansas - Digital Publishing
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14 January 28, 2013 <strong>Arkansas</strong> Business<br />
Congress delayed automatic spending<br />
cuts that included pushing back a<br />
2 percent Medicare payment reduction<br />
until March 1.<br />
That move to avoid the “fiscal cliff”<br />
postponed across-the-board budget cuts<br />
demanded under the sequestration component<br />
of the 2011 Budget Control Act,<br />
and it gave another temporary reprieve<br />
to doctors.<br />
But it has done little to ease the uncer-<br />
SPOTLIGHT: The Future of Health Care in <strong>Arkansas</strong><br />
Medicare Cut Threatens to Cost Hospitals $407M<br />
By George Waldon<br />
George@ABPG.com<br />
Paul<br />
Cunningham<br />
tainty of how much<br />
financial pain health<br />
care providers, particularly<br />
hospitals, will have<br />
to endure in the budget<br />
process. <strong>Arkansas</strong><br />
hospitals were bracing<br />
for $42.6 million in lost<br />
revenue during 2013<br />
alone from the 2 per-<br />
cent Medicare cut. Over 10 years, lost<br />
revenue from the deficit-reducing gambit<br />
was projected to top $407 million for<br />
the state’s roster of hospitals.<br />
“Aggregately, <strong>Arkansas</strong> hospitals<br />
stand to lose $2 billion over a 10-year<br />
period in Medicare cuts, and that applies<br />
pretty much to hospitals across the<br />
board,” said Paul Cunningham, executive<br />
vice president of the <strong>Arkansas</strong><br />
Hospital Association. “For <strong>Arkansas</strong>, that<br />
is a lot, and it will try many hospitals.”<br />
More than a third of the hospitals in<br />
the state already were running in the<br />
red, according to an annual checkup by<br />
<strong>Arkansas</strong> Business in October. Of the 91<br />
hospitals in <strong>Arkansas</strong>, 33 reported losses<br />
in their most recent annual reports.<br />
Skilled Nursing Facilities<br />
provide quality care, jobs and<br />
economic impact for <strong>Arkansas</strong><br />
arhealthcare.com<br />
While politicians wrangle over health<br />
care reimbursements, hospital administrators<br />
are forced to move forward with<br />
budgets bolstered by contingency plans<br />
aplenty.<br />
Larry Morse, CEO at Johnson County<br />
Regional Medical Center<br />
in Clarksville, headed<br />
into 2013 with a fiscal<br />
battle plan prepared for<br />
the worst scenarios and<br />
hoping for the best.<br />
“We had put in place<br />
a plan to reduce our<br />
expenses by approximately<br />
$500,000,” said<br />
Morse. “That plan in-<br />
Larry<br />
Morse<br />
cluded a reduction in matches to retirement<br />
plans and adjustments to a litany<br />
of items we pay for.”<br />
Examples of the cost-cutting laundry<br />
list included lowering premiums paid<br />
for weekend work by staff, adjusting the<br />
physician staff call coverage, reducing<br />
managerial salaries, reducing payments<br />
for subsidized services and cutting anesthesia<br />
services costs.<br />
“As of today, it looks like we won’t have<br />
to implement all of those cuts, but we’re<br />
still cautious,” Morse said. “Our goal<br />
was, No. 1, to affect the fewest number of<br />
people, which was a challenge.<br />
“Aggregately, <strong>Arkansas</strong><br />
hospitals stand to lose<br />
$2 billion over a 10-year<br />
period in Medicare cuts,<br />
and that applies pretty<br />
much to hospitals<br />
across the board. For<br />
<strong>Arkansas</strong>, that is a lot,<br />
and it will try many<br />
hospitals.”<br />
[PAUL CUNNINGHAM, EXECU-<br />
TIVE VICE PRESIDENT OF<br />
THE ARKANSAS HOSPITAL<br />
ASSOCIATION]<br />
“We have placed a priority on keeping<br />
staff employed and second, not to<br />
cause financial harm to our lowest-paid<br />
employees. About 28 percent of our staff<br />
is paid under $9 an hour.<br />
“At some point, if we continue to get<br />
cuts, we’re going to have to look at other<br />
issues.”<br />
Johnson County Regional Medical<br />
Center is among four <strong>Arkansas</strong> hospitals<br />
that received a budgetary reprieve<br />
thanks to an 11th-hour deal to extend the<br />
Medicare Dependent Hospital Program.<br />
Congress allowed MDH to expire<br />
on Sept. 30, but then the program was<br />
revived with funding of $100 million as