Hospitals like ours expect to once again endure budget cuts in the coming year, as State policymakers enacted another 5 percent reduction to what our facility is reimbursed for care provided to Medicaid recipients. This cut amounts to the loss of about $120 million for hospitals statewide, including over $50,000 here at Wickenburg Community Hospital.
As with other Arizona hospitals, the WCH management team has done everything in its power to identify internal efficiencies that will save money and not impact patient care. But, unfortunately, there is only so much we can do on our end if the state continues down this path of continuous cuts to healthcare providers.
While our hospital has worked diligently over the past 15 years to add new programs and services, to stabilize hospital finances, and think “out of the box” around the generation of unconventional sources of new revenue, perennial reductions in compensation through both the Medicaid and Medicare programs will make a progressive strategy much more difficult to sustain.
To better understand our current financial situation, consider this: For every Medicaid patient receiving care, hospitals are only reimbursed 70% of the cost for treatment. The disparity has only grown in recent years – reimbursement rates currently paid by the State to hospitals for Medicaid care are actually down 10 percent from 2007 levels. Since the economic downturn began, combined State cuts to Medicaid payments and other hospital programs total more than $1 billion.
This is simply unsustainable.
With this in mind, it should come as no surprise that nearly 1 in 3 Arizona hospitals are functioning at a loss. Also, overall operating margins continue to shrink, down a full percentage point since 2013. Some State policymakers have the false impression hospitals are flush with cash; I can assure you that is far from true.
WCH has been a staple in the Wickenburg community since 1926. Providing quality patient care is our mission and top priority. But it is time that we have a serious conversation about the future of Arizona’s Medicaid program and how it is funded in order to ensure patients in every corner of our state have continued access to life-saving care.
On behalf of WCH, we stand ready to play a role in this conversation – together with local and State policymakers, health providers and business leaders – as we discuss how to make our healthcare system stronger and more efficient with taxpayer dollars. We owe our patients nothing less.
Jim Tavary is the Chief Executive Officer of Wickenburg Community Hospital