Safety net hospitals face tough choices

The General Assistance Medical Care program serves childless adults whose income is less than $8,000 a year. The governor cut the program's entire $381 million budget.

Since the cuts don't take effect immediately, Gov. Pawlenty told lawmakers they still have time to address the change if they choose. He also said many GAMC enrollees would be eligible for other health coverage under the state-subsidized MinnesotaCare program.

But Dr. Michael Belzer, medical director at Hennepin County Medical Center in Minneapolis, sees flaws with both arguments. Belzer said hospitals will set their budgets for next year long before lawmakers reconvene next session. So they have to make budget decisions with the assumption that the money won't be restored. He also doubts many GAMC participants will sign up for MinnesotaCare.

"If you have familiarity with this program and these patients, because of co-morbidities and behavioral illness issues they have, expecting them to enroll and then pay a monthly enrollment fee, at least in our experience, is unlikely to happen," Belzer said.

HCMC is the state's largest safety net hospital. It receives approximately $40 million each year in income from treating GAMC patients, but the actual cost of the program cuts could be substantially higher.

The Minnesota Hospital Association estimates that HCMC would lose over $100 million. The industry trade group said GAMC patients who used to get some care in clinics will now have no choice but to go to the emergency room to get care.

Michael Belzer said HCMC has always had a very liberal treatment policy for uninsured patients. But he said that might have to change.

"We always have considered ourselves as a state institution and we're seriously going to have to consider where we're going to draw the geographic boundary for taking patients in our outpatient system for care if they're uninsured or do not have a reimbursement source," Belzer said. "That may well be around the metropolitan area or more likely just Hennepin County."

"If you're planning on going to the emergency room you better bring a good book because there's going to be a long line."

Regions Hospital in St. Paul, the other major safety net hospital in the Twin Cities, also faces some tough choices due to the GAMC cut.

President and CEO Brock Nelson said Region's will lose $35 million next year and likely millions more from unpaid medical bills. Nelson said the financial impact is devastating.

"The burden for the state's budget problem is being placed on the backs of a few hospitals that serve the safety net patients," Nelson said. "And we have to bear the burden for the entire, a substantial part of this deficit. And that's what hurts because it's inequitable."

Advocates for health care workers said the budget consequences are so acute that even Minnesotans with health coverage will feel the effects.

"If you're planning on going to the emergency room you better bring a good book because there's going to be a long line," said Rick Varco, political director for SEIU Healthcare Minnesota, a division of the Service Employees International Union

Varco said, while the emergency rooms might be busier as a result of state cuts, he thinks hospitals overall could be much quieter.

"If parts of hospitals shut down or programs shut down or any sort of cut backs that the hospitals make to meet these cuts are going to affect not just our members and not just people on GAMC, but everybody who relies on the health care system," Varco said.

The GAMC program is currently the most visible health care victim of the state's budget crisis, but that could change in the days and weeks ahead. Unless a budget agreement in reached by midnight, the governor can use his authority to cut more money out of the Human Services budget.

Michael Scandrett, a lobbyist with the Minnesota Safety Net Coalition, said that opens up the possibility of cuts that could affect many more people.

"There's serious, serious fear among the health care organizations that serve low-income, vulnerable, disadvantaged populations because, given the governor's track record on these programs, we would expect that he would target these programs for cuts," Scandrett said. "There would be a lot of clinics that I don't know how they would stay in business."

The governor hasn't said what programs are on the chopping block, but said the growth in health and human services spending is unsustainable.

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