The number of people in Ohio's medicaid system has grown roughly six percent in the last year – To pay for the added cost Governor Strickland has proposed assessing a fee to hospitals and nursing homes that would not only cover the medicaid shortfall but provide higher reimbursement rates for hospitals. Everyone agrees the current amount the state pays hospitals for Medicaid patients is not sustainable.
HIMMELREICH: There aren't a lot of business models where you can recoup half of your costs and continue to operate.
That’s Tiffany Himmelreich of the Ohio Hospital association. She overstates the problem but not by a lot. Hospitals are already losing 14 cents for every dollar they spend treating Medicaid patients. Without the money generated by the new fees, Governor Strickland has said he would have to cut rates even further and hospitals would loose nearly 30 cents on the dollar.
Another part of the remedy for the strain Medicaid is under is that the federal stimulus package moving through Congress calls for Uncle Sam to carry more of the cost burden. Bill Hayes is president of the Health Policy institute of Ohio, an independent, health care think-tank. He says putting the revenue from the new fees on hospitals back into the Medicaid system makes a lot of fiscal sense.
HAYES: This tax would actually bring more federal money in if that happens.
The way this all works out, the nearly 283 million dollars in hospital assessment fees anticipated under the Governor’s proposed budget would produce more than a billion dollars in Medicaid funding.
But not everyone is thrilled. Hospital budgets are already tight, and those with a higher proportion of Medicaid patients stand to benefit more in reimbursements than affluent hospitals where the majority of patients carry private insurance.
Gretchen Cuda, 90.3