Health Care

Public hospitals brace for possible cuts as Florida’s budget stalemate continues

Dr. Nabil El Sanadi , president of Broward Health, speaks at the press conference to discuss financial impacts on Broward hospitals of the budget stalemate in Tallahassee.
Dr. Nabil El Sanadi , president of Broward Health, speaks at the press conference to discuss financial impacts on Broward hospitals of the budget stalemate in Tallahassee. MIAMI HERALD STAFF

Broward County’s public hospitals have begun preparing for the potential loss of a combined $180 million a year in federal funds that help pay for the cost of care for the uninsured and for medical student training.

Gathering at the Broward Governmental Center in Fort Lauderdale on Monday with county commissioners and Democratic state senators and representatives from local districts to sound alarm, administrators for Broward Health and Memorial Healthcare System said they are considering reductions to non-critical programs. The state Legislature has been unable to craft a budget so far this year, deadlocking over healthcare funding issues and creating big questions for public hospital budgets.

Nabil El Sanadi, an emergency medicine physician and chief executive of Broward Health, which serves the northern portion of the county, said his hospital system stands to lose about $92 million a year, or roughly 10 percent of its annual budget, if state leaders and federal regulators cannot reach agreement on renewal of a $2.1 billion funding program known as the Low Income Pool or LIP.

“We’re going to keep our doors open,” El Sanadi said. “Patients will get 100 percent of the care they need, not 90 percent. … But we’re already starting the belt tightening.”

El Sanadi said Broward Health is considering reducing expenses “for all the stuff that’s nice to have but is not life critical,” citing as examples post-operative rehabilitation programs, such as occupational therapy and nutritional education.

John Benz, a senior vice president for Memorial Health Care System, which serves South Broward, said the hospital system could lose $90 to $100 million a year if LIP is not renewed or replaced.

Federal officials informed Florida’s healthcare agency in April 2014 that LIP would expire on June 30 of this year.

Benz declined to cite specific programs that would be cut, but he said he was certain of one area that would suffer: patient access.

“Access to healthcare will go down,” he said.

State legislator, Broward commissioners, including Mayor Tim Ryan, and the president of the Greater Fort Lauderdale Chamber of Commerce attended Monday’s press conference. All expressed support for a plan approved by the Florida Senate but rejected by House leaders. The plan would expand Florida’s restrictive eligibility criteria for Medicaid, the federal-state health program for the poor and disabled, and would restructure the LIP program to address the federal government’s concerns about equity and transparency.

Last week, Miami-Dade Democratic legislators and Jackson Health System doctors and nurses held a rally to push for Medicaid expansion.

The issue has driven a wedge between the legislative chambers – with Gov. Rick Scott siding with the House – and caused House leaders to abruptly end the legislative session on April 28 without adopting a state budget.

A special legislative session has been scheduled for June 1-20, but it’s unclear how the issue will be resolved.

Federal regulators have told Florida officials that they will not allow the LIP program to pay for medical care for an estimated 850,000 uninsured Florida residents who would be eligible for Medicaid under an expansion plan.

Benz and El Sanadi both said that neither of their boards of directors, whose members are appointed by Scott, have considered raising local taxes to help make up the loss of federal funding.

But both said that higher local taxes could be considered if another solution is not found.

“With certainty, that would be our very last option,’’ El Sanadi said.

“We wouldn’t raise taxes in the short term,’’ Benz added. “But if it becomes a long term issue, then we would have to reconsider.’’

Benz noted that LIP was the more critical issue for Memorial in the short term, and that the uninsured – an estimated 350,000 people in Broward, of which about 80,000 would be eligible for Medicaid under an expansion plan – are “getting sicker and sicker all the time,’’ adding to the urgency.

Dan Lindblade, president of the Fort Lauderdale Chamber of Commerce, noted that state businesses face as much as $250 million a year in tax penalties for failing to provide health insurance for full-time employees and their dependents unless the Legislature acts to adopt the Senate’s plan.

Ryan, the Broward mayor, noted that the uninsured patients often do not seek healthcare until their medical condition has become urgent, and they tend to visit hospital emergency rooms — the most expensive form of care.

That forces hospitals to shift costs, making up for uncompensated care delivered in the emergency room by raising prices in other areas and passing that on to insured patients.

Ryan called this a “hidden tax on Floridians,” which he said would be ameliorated by covering more eligible uninsured residents through Medicaid.

With the federal government offering to pay for 100 percent of the cost of expanding Medicaid through 2016, and then never less than 90 percent after that, Ryan said, “It’s foolish not to accept this money.’’

But Florida House leaders and Scott have said that they do not want to add more Floridians to what they see as a “broken” Medicaid system, and that the state would be on the hook for the program’s growing costs.

Currently, Florida spends about $9.5 billion a year on Medicaid – about 20 percent of state spending.

Florida Sen. Jeremy Ring, a Broward Democrat, said he was particularly upset by Scott’s latest proposal that hospitals consider profit-sharing to make up for the potential loss of LIP funding.

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