The tidal waves of the fiscal tsunami generated by the recession that closed the last Bush era of fiscal disaster (discussed in the editorial above) continue unabated. Tennessee Gov. Phil Bredesen's latest proposals to deal with Tennessee's imploding budget partly through more Medicaid program cuts serve as a ready example of the public health-care consequences.
With the state still challenged by falling tax revenue and unmanageable Medicaid costs, Gov. Bredesen proposed further cuts of $200 million last week to the state Medicaid/TennCare program, in addition to the $170 million he cut last year. Because state Medicaid funding draws down far larger federal matching funds for Medicaid -- generally on a 2-to-1, federal-to-state ratio -- the governor's new cut would produced an estimated $526 million loss to the state's already strapped hospitals, the president of the Tennessee Hospital Association said last Wednesday.
"We're looking at an Armageddon," said THA president Craig Becker.
That isn't hyperbole. Worse, those cuts would fall most heavily on the state's big safety-net hospitals that provide care for the largest numbers of Medicaid patients. These hospitals especially need full state funding to qualify for Medicaid's full federal share, plus the critical "disproportionate share" funding for safety-net hospitals.
Memphis' Regional Medical Center, widely known as The Med, is already on its fiscal knees. It's under continuing pressure to generate enough operating cash to meet daily payroll, purchasing and equipment needs.
Erlanger Hospital, the Chattanooga area's mainstay public hospital, balances its public-private patient loads and manages its cash flow far more evenly than the Med. But like large public hospitals in other cities with unique Level I trauma care and a significant indigent burden, Erlanger would still be staggered by the governor's proposed cuts.
Other health-care providers, from physicians to labs to imaging centers, also would come under additional financial pressure if the state cuts Medicaid funding. Such cuts could prompt providers to drop out of the program. That would further jeopardize care for the state's 1.2 million TennCare enrollees -- a number which accounts for more than a sixth of Tennessee's total population.
Mr. Bredesen's Medicaid cuts should not stand. But the Legislature, controlled by Republicans who had rather impose harsh emotional and physical costs on citizens than raise taxes modestly, is almost certain to go along. More people will suffer deeply, and needlessly, for these misguided policies.