The Republican TV ads for November must already be filmed and ready to go. Republicans running for state offices have clearly decided to jump on the bandwagon of opposition to the national health care bill.

And so Republicans in the Legislature — led by gubernatorial candidate, Tom Emmer — walked away from $1.4 billion in health care investments that would have immediately shored up struggling hospitals and clinics and held down your health care premiums. This is cynical politics at its worst and Minnesotans should be outraged.

Here?s the background: Minnesota currently pays the cost of health care for about 82,000 of the poorest, most vulnerable Minnesotans without children using only state tax dollars. But this year, we are being given the opportunity to immediately move those individuals to Medicaid, which means that the federal government would pick up half of the cost of their health care. Taking advantage of the offer would be incredibly beneficial for Minnesota.

Indeed, the deal is so good for Minnesota that Gov. Tim Pawlenty (no fan of federal health care reform) initially offered to include the Medicaid option as

part of the final state budget agreement — until Republican legislators raised such a political ruckus that the governor retreated.

So what does the Republican?s decision to kill the opportunity mean?

First, thousands of health care jobs in Minnesota will be lost at a time when we can ill-afford more unemployment. Local hospitals and clinics will miss out

on dramatically improved reimbursement rates and will suffer millions of dollars in losses instead. And every one of us with private health insurance will experience higher premium increases in the future to make up for those losses.

Moreover, by refusing the new Medicaid option, a cash-strapped state of Minnesota will miss the chance to draw down $1.4 billion in federal funds, money that will now go to other states to help balance their state budgets. Passing up the federal help makes little sense for Minnesota which today only gets back about 76 cents for every federal tax dollar paid to Washington, D.C.

Moreover, we could draw down the $1.4 billion with an investment of $190 million state dollars. It boggles my mind that Republicans, who seemingly pride themselves on their business acumen, would have passed on the opportunity to get back $7.45 for every dollar invested.

But that?s not the worst of it. The same Republicans in the Minnesota House who vehemently oppose the Medicaid option today actually offered and supported an essentially identical proposal to move those 82,000 Minnesotans into Medicaid just one year ago!

So why did the Republican legislators flip-flop and reject the chance to preserve good jobs, hold your health care premiums down and get back some hard-earned federal tax dollars to Minnesota?

The answer is obvious: Electoral politics. The Republicans, from Tom Emmer on down, want to scare the people of Minnesota with the specter of “Obamacare” to gain votes in November.

Don?t buy into the fear-mongering. The Medicaid option is not government take-over of health care. It is simply a fuller utilization of a health care program that began in 1965 and is largely administered by private health insurance companies.

In other words, when a Republican legislator or candidate says he opposes “government take-over of health care”, what he?s really saying is that he wants to get rid of a program that already provides coverage for more than 500,000 Minnesotans each month; more than half of them are children and families, the remaining are seniors and people who have disabilities.

So next time you see Tom Emmer or a Republican legislative candidate, ask him why he doesn?t want Minnesota to get more of your hard-earned federal tax dollars back. Ask him why Republican legislators were overwhelmingly for the Medicaid option before they were against it. And ask him why he is unwilling to stand up for Minnesota hospitals and clinics and fight to preserve Minnesota jobs. And when you go to the polls in November, remember the answers.

“I want to be clear, the decision to drop health care for over 30,000 Minnesotans was immoral and unacceptable to the people of Minnesota.” Representative Thissen said during visits in Bemidji, Brainerd, and Detroit Lakes. Stops at hospitals in Cloquet, Cambridge and the Twin Cities will continue through this week.

To read more about Paul’s visits, please click on the links below.

Bemidji Pioneer: Panel to hear effect of state GAMC cuts to NCHS

Bemidji Pioneer: Health care cuts increases ER visits

Brainerd Dispatch: Health care officials point to pain from Pawlenty budget cuts

Detroit Lakes Tribune: Legislators tackle health care in visit

MPR: DFLers seek health care options in wake of governor’s cuts

Politics in Minnesota:HCMC stands to lose up to $109 million with GAMC elimination

By Tim Nelson, Minnesota Public Radio, July 3, 2009

Minneapolis — Gov. Tim Pawlenty’s plan to balance Minnesota’s budget is getting some of its stiffest resistance from health care providers.

The unallotment of millions of dollars in health care spending for the poor has them worried about tens of thousands of Minnesotans that may have no more medical coverage next spring.

Democratic lawmakers have been traveling the state this week, trying to come up with another plan for those who are cut off.

Minnesota’s financial crisis may hit hardest in downtown Minneapolis, at the sprawling Hennepin County Medical Center. It’s the flagship of a public health system that gets gets more more than 300,000 clinic visits alone every year.

Cuts to General Assistance Medical Care, or GMAC, could cost HCMC $43 million over the next two years. The money pays for care for people who make eight thousand dollars a year or less.

Former Minneapolis mayor and hospital board member Sharon Sayles Belton laid out for lawmakers what that may mean.

“We will have to reduce or eliminate the services that are what we call the worst financial providers,” she said. “This could include things like our primary care clinic, our specialty services for problems like diabetes, our dental services and some of the components of our mental health service continuum.”

It’s a story that lawmakers have been hearing all over the state.

But they’re offering little hope to health care providers that the cuts will be averted.

State Sen. Linda Berglin, DFL-Minneapolis, pointed out that the cuts are set to take effect next March, just three weeks after the Legislature reconvenes for its 2010 session. She told dozens of people at the House Health and Humans Services Policy and Oversight Committee that there simply may not be enough time.

“I have no idea. If I had a great master plan, in my hip pocket, I’d whip it out and say, oh, look, this isn’t so hard,” she said.

She urged her fellow lawmakers and the health and state at HCMC to come up with a list of where else in the state they could find $400 million to pay for health care for the poor.

But officials are eyeing ideas, too, and hinted at some of them at today’s hearing.

Hennepin County Board Chairman Mike Opat said that the county’s hospital won’t turn the needy away, but property tax payers may have to pick up more of the burden for their care.

Rep. Julie Bunn, DFL-Lake Elmo, suggested that as many as one-third of Minnesotans in their 20s might be eligible for cheap insurance for catastrophic care they could buy in the private market for less than $1,000 a year.

Committee chair Rep. Paul Thissen, D-Minneapolis, said there may be other programs, like housing or social services, that could avert some of the need for health care among the poor.

He also offered some other proposals, like paring back the overall benefit levels offered to the poor and getting more people signed up for Supplemental Security Income, a federal program for the disabled and elderly.

“And you know the governor proposed putting this uncompensated care, reducing funding significantly but putting an uncompensated care pool in place so that the money would not go toward insurance, and getting insurance so the individuals and just having a pool of money that would support places like HCMC or community clinics,” Thissen said.

“We’ve kind of gotten mixed reviews to that kind of thought, because there is a benefit to getting people insured once they leave the hospital doors.”

State and health officials have eight months to come up with a plan B. The existing money officially runs out Feb. 28.

By Brad Swenson, Bemidji Pioneer, July 3, 2009

State cuts to health care for Minnesota’s poorest adults means a 28-year-old diabetic may go without insulin, or a 63-year-old diabetic alcoholic with cancer goes without treatment.

“You need to put a face to who this is going to impact,” Margaret Demers, North Country Regional Hospital lead social worker, told a Minnesota House panel Thursday morning about the effect of eliminating the General Assistance Medical Care program.

The 28-year-old, she said, is on two different insulins which he can’t afford without GAMC coverage. Not taking insulin will lead to more serious medical problems such as organ failure, foot wounds, amputations, and leading to losing the ability to work.

The 63-year-old is short of qualifying for Medicare. “In our area, we have a significant population of chemically dependent patients who fall into the GAMC category,” Demers said. “They struggle with life, their addiction and serious health problems. By its nature, chemical dependency affects their ability to function normally and as their illnesses progress, so do their medical problems.”

Gov. Tim Pawlenty, as part of an effort to bridge a $3 billion budget gap between the DFL-controlled Legislature’s spending bills and expected revenues for the biennium that started Wednesday, line-item vetoed funding for the GAMC program.

The program, which provides health care coverage for the state’s most destitute adults, would see funding cut as of March 1 and into the second year of the biennium. Pawlenty excised about $400 million, a figure that will be $888 million in the next biennium if it is not restored.

The House Health and Human Services Policy and Oversight Committee is traveling northern Minnesota to hear from local hospitals about the affect of losing GAMC, and was in Bemidji on Thursday.

Committee Chairman Rep. Paul Thissen, DFL-Minneapolis, and Rep. Erin Murphy, DFL-St. Paul, and panel staff met with about 25 local medical and social services officials.

Demers outlined six cases of real people on GAMC. “The person may choose to not even seek treatment or not even try because they can’t pay for it. We see that a lot with populations that don’t have coverage. They wait until its turned into a very, very huge medical problem. They don’t come in for prevention or day-to-day management.”

A survey of 10 percent of about 650 GAMC enrollees served by North Country Regional Hospital shows an average age of mid-30s, from 21 to 63, said Jim Hanko, president and CEO of the parent North Country Health Services.

Of the sample, 63 percent were self-designated as American Indians who live in Bemidji or on an area reservation. Seventy-two percent were self-designated as unemployed.

“The majority of the services — 60 percent — were provided in the emergency department,” Hanko said. “And 20 percent were in the imaging department, which is an expensive modality.”

Under a fee for service program, 652 individuals had 1,033 GAMC accounts last year, Hanko said, with gross charges of $3.2 million. State reimbursements were $1.1 million while the cost to provide services was $1.7 million.

And, under the state Pre-Paid Medical Assistance Program, only 55 percent of costs is reimbursed, he said.

“We have an estimate from the state that the total impact for GAMC in our particular locality is about $4.8 million to $4.9 million,” Hanko said. “That includes clinic services received by people at MeritCare and other clinics and includes the emergency department and any in-patient services.”

That amount will become the uncompensated care if all the GAMC patients became patients at NCRH, mostly likely through the emergency department, he said. The emergency room then becomes the safety net for all who can’t afford medical care.

Thissen said the Legislature’s focus will be on the “bigger health care reform that we need to do in this state. … We really need to focus on how we’re going to help this population — folks who are going to be with us regardless whether we’re paying for them or not.”

Murphy is floating around some ideas that may help, she said.

“A lot of them are poor because they’re sick,” she said of GAMC patients. “We know they’re poor because the income standards are so low. … A lot of them are sick and probably not able to work.”

Legislators need to understand the population in order to find solutions, Murphy said, listing off pretty sick, some mentally ill, suffering from chemical dependency, chronic diseases.

“A lot of states are looking at care coordination,” she said. “We keep hearing from hospitals that this population looks at the hospital as their primary care source, to come here to the emergency room because that’s what they know. Is it possible for us to figure out how to deliver care in an out-patient way where the patient is, get them healthier, keep them healthier so they’re not coming to the hospital in their most chronic state, and then we’re incurring these large costs.”

The benefits of coordinated care is savings to the system, delivery of better care, and allowing a better life for the GAMC population, she said. “To do it means we’ll have to work across the system – the health care system and the social services system … to do that kind of intensive coordination.”

It was suggested that the population could be served by more urgent care or “minute clinics,” but there is a lack of primary care providers. It’s tough to recruit new doctors to Bemidji, as rural salaries are lower and on-call hours greater than in the metro area, said NCRH Dr. Robert Rutka.

There were discussions of starting a “minute clinic” but there aren’t enough primary care physicians to staff it, he said.

State changes in credentialing are needed to allow mid-level practitioners to perform some duties now delegated to physicians or physician assistants, said Bob Verchota, NCHS vice president of human resources and ancillary services.

“From a human resources perspective, there’s one thing you could do,” he said, “and that is to support some changes in the licensure requirements through either the credentialing, certifying licensure, etc., to increase the capacity.

“We don’t have the capacity up here from an access standpoint to even get people in if we wanted to,” Verchota added. “We’re sending people … to Park Rapids and Deer River for primary care.”

Some positions are fully capable of providing primary care, such as in lab, rehab or imaging, and in mid-level area alternative to physicians, he said. The problem affects all who seek medical care, not just GAMC patients, he added.

“No supply, the price goes up,” Verchota said.

“It doesn’t make sense to pay lower reimbursement rates to rural communities that are having the hardest time attracting doctors,” said Sen. Mary Olson, DFL-Bemidji.

“We’re actually seeing an outflow of nurse practitioners,” Rutka said. Another problem is while MeritCare has an urgent care office, it closes at 5 p.m., with center referring patients to the hospital emergency room after about 3:30 or 4 p.m.

?We’ve had a net outflow of nine primary care providers in this community in the last three years,” Rutka said. “I, as a family doctor, can probably take care of 92 percent of the things that come through my door.”

Another problem, participants said, with the high percentage of American Indians on GAMC, U.S. Indian Health Service is not always paying for services.

Georgia Downwind of Beltrami County Human Services at Red Lake, said IHS once paid for most services, but the number of those seeking services has grown while money to pay for services hasn’t, forcing partial or no payment.

And, if an Indian who lives on the reservation gets a heart attack while in Bemidji, HIS won’t pay for those services, she said.

“The misperception is that Indian people in this area in the treaties that were signed 100-plus years ago the federal government guaranteed health care services to them,” said Rep. John Persell, DFL-Bemidji. “That’s not being provided, obviously.”

It’s a shortcoming of the federal government, he said. “Indian people believe, and they know because it’s written on paper, we are guaranteeing health care services. That adds to the overall complexity of the situation.”

Indian people have to apply for some other medical service and get denied before using HIS, which Persell said “befuddles” him.

Participants also said transportation was a problem, as many poor adults have no means to seek medical care if they live outside of Bemidji. And, some are homeless and the system can’t find them after they’ve sought initial care.

“In many ways it isn’t a problem of having people finding people, it’s having them stay found,” said John Pugleasa of Beltrami County Health and Human Services. Continuity of care is hard, he added. “Having this population stay found, leading to any kind of continuity, is a real challenge.”

That could be helped with more affordable housing and transitional housing, he said.

By Mike O’Rourke, Brainerd Dispatch, July 3, 2009

Area health officials told state lawmakers Thursday how their institutions will be affected by the March 1 elimination of a state medical assistance program for low-income patients without private insurance.

The General Assistance Medical Care program was among the unallotment cuts Gov. Tim Pawlenty made in order to balance the budget after he and lawmakers failed to reach agreement.

The discussion Thursday took place before members of the Minnesota House Health Care and Human Services Policy and Oversight Committee at St. Joseph’s Hospital in Brainerd.

Dr. David Boran, chief medical officer of the Brainerd Lakes Health System, said St. Joseph’s Medical Center cared for 530 GAMC patients this year. Sixty-two percent were seen in the Emergency Department and 20 percent of the 530 patients were admitted to the hospital. He said the gross charges for these patients exceeded $2.8 million. After partial reimbursements are made by the state the hospital costs are $1,093,259, resulting in subsidy of $420,00 to care for these patients.

he GAMC patients, Boran said, are primarily very low-income adults between the ages of 21-64, without children. They often suffer from chronic health problems such as diabetes mellitus, AIDS, heart disease, chronic mental illness or chemical dependency.

Boran noted that as a result of the governor’s veto $18 million in federal revenue in Fiscal Year 2011 will be lost across the state. This year, he said, St. Joseph’s Medical Center will receive $650,000 in Medicare payments for providing a “Disproportionate Share” of care to the poor.

“This plan is penny-wise and pound-foolish,” he said of the veto that will also result in the loss of federal matching funds.

“Minnesotans who pay federal income taxes will, in effect, be subsidizing the Medicaid programs in all those other states that do not cut their Medicaid funding,” he said.

He said the cost shifting that’s part of the health care system – charging those with private insurance more to underwrite the cost of government programs – is a hidden tax.

“This cannot go on,” he said. “Employers in Brainerd and elsewhere are stretched to the limit,” he said. Some can no longer afford to provide health insurance for their own employees, let alone underwrite the cost for others. Brainerd Lakes Health is unable to underwrite additional costs.”

Jani Wiebolt, president of St. Joseph’s Medical Center, said the hospital has implemented a wage freeze, a hiring freeze and has had workforce reductions. She said St. Joseph’s average daily census is 70 patients and noted that there are four hospitals within a 35-mile radius.

Susan Beck, Crow Wing County Community Services director, said the budget cuts would unravel the current health system and force more people to the emergency rooms for health care.

“We’re very reliant on the services of St. Joe’s,” she said. “Without St. Joe’s we lose a huge piece of the mental health puzzle.”

While Beck said she didn’t have a simple solution she told the panel care coordination would be a part of the answer. The needs of GAMC patients often include housing, employment, mental health and medical, she said.

Rep. John Ward, DFL-Brainerd, discussed the good work being done by the Region 5 Adult Mental Health Initiative.

Wiebolt said the hospital has not planned another round of layoffs. She said whatever cuts might come would likely be in the supervisory and support areas rather than “care at the bed side.”

Rep. Erin Murphy, DFL-St. Paul, said “If we don’t solve this problem hospitals are going to take a financial hit.”

Rep. Paul Thissen, DFL-Minneapolis, said an integration of services that would provide ongoing support in such areas as housing, might be part of the solution. Before March, he said after the meeting, he hoped that a different model of GAMC can be structured with an existing revenue source or reform proposals can be initiated that might lead to refunding of the program.

“It’s clear … just eliminating health care coverage is not the way to get there,” he said during the meeting.

Other lawmakers who attended the committee meeting were Rep. Al Doty, DFL-Royalton, Rep. Karla Bigham, DFL-Cottage Grove, Rep. Tom Huntley, DFL-Duluth.

By Jason Atkins, Detroit Lake Tribune, July 3, 2009

Health care reform continues to be a tricky issue to wade through.

A few members of the state House Health Care and Human Services Policy and Oversight Committee came through Detroit Lakes on Wednesday to solicit comment from local stakeholders on what is needed in health care reform.

“We need to get the perspective of those on the ground,” said Committee Chairman Paul Thissen (DFL-Minneapolis).

St. Mary’s Innovis CEO Tom Thompson said that the elimination of the state General Assistance Medical Care program will hit hospitals hard, since those without insurance will turn to local emergency rooms for medical care.

“It’s one thing to complain about cuts, but we’re facing a world with difficult decisions,” Thompson said.

Thompson said that the reality for St. Mary’s Innovis is that over half of its revenue comes from the federal and state government in the form of Medicare, Medicaid and other public insurance programs.

He said that his organization is what’s called a “tweener” hospital because it’s too big to qualify for critical access payments, but too small to offer more profitable services that hospitals in major metro area have available.

With the cut to GAMC, Thompson said that St. Mary’s Innovis stands to lose $3.5 million in revenue. The total operating budget for the organization is $76 million.

He said that the goal for health care reform should be to provide coverage for everyone.

Becker County Human Services Director Nancy Nelson said that Becker County, along with adjacent counties, suffers from a disproportionate number of people living under the poverty level. She said that the poverty rate in the county is about 12 percent, while the statewide average is around 7 or 8 percent.

She said that 449 people in the county have GAMC, about one percent of the total county population.

“It serves the poorest of the poor,” Nelson said.”

With the elimination of GAMC, she said that the ultimate cost of providing health care for the poor would fall on taxpayers under the current system.

Rep. Paul Marquart (DFL-Dilworth), whose district covers the city of Detroit Lakes, said that the current system is unsustainable.

“If we don’t get a handle on this, it will take up all of the budget,” he said.

What’s not up for discussion is cutting back on services, Thompson said.

“We sure as heck won’t cut care,” he said.

St. Mary’s Innovis physician Dr. Bob Koshnick said that a system of assigning people a medical home would help cut down costs.

Under such a proposal, those who have GAMC or similar coverage could only see a doctor in one health organization. The definition of a medical home is still subject to debate.

Koshnick said that a medical home would be more efficient and stop people from physician hopping.

“If you have a personal relationship with a medical home, you reduce costs,” he said.

Besides a medical home, the poorest of the poor may also need help with stable housing and mental health care, Nelson said.

She said that mental health holds at hospitals cost up to $1,000 a day. Those who need help with drug and alcohol detoxification cost $300 per day.

And the ER isn’t a solution either.

“It is not the place to receive primary care,” Thompson said.

Rep. Erin Murphy (DFL-St. Paul) said that solving the ER problem is tricky.

“Are we under the false assumption that we could change people’s behavior so that it will drive down costs?” she said.

Ultimately, a solution will depend on what the federal government does with an overhaul to the health care system.

“We need to come together and make the best use of these resources,” Murphy said

To read the full article, click here: Panel to hear effect of state GAMC cuts to NCHS

By Lori Sturdevant, Star Tribune, May 23, 2009

No one who watched the failed veto override attempt last Sunday in the Minnesota House will soon forget Gov. Tim Pawlenty’s veto of funding for health care for the poorest of the poor.

Memorable moments were many in the eerily hushed chamber that day. There was the choked voice of ordinarily stoic Rep. Lyndon Carlson, as he spoke of friends who died too soon because they lacked health insurance. There was Rep. Jeremy Kalin’s warm regard for the man he unseated, Rep. Pete Nelson, R-Lindstrom, whose life was saved after a butcher shop accident by Regions Hospital — an institution set to lose $46 million in fiscal 2011 because of the veto.

There was the silent witness in the gallery of three jobless men whose treatment for multiple mental and physical disorders depends upon the vetoed program. With it, the men said, they have hope of recovering and working again. One dreams of joining the Navy. Without it? They sadly shrugged.

And there was the GOP response: Charity isn’t government’s role. (Was that an echo from the 19th century?) People who make bad choices should feel the consequences. (If the mentally ill don’t get medicine, who bears those consequences?) The program wouldn’t be in jeopardy if DFLers had spent less elsewhere. (Then why didn’t the governor veto those lower priorities instead?)

The debate was riveting — for the few Minnesotans who caught it on a lovely springtime Sunday afternoon.

But to those who weren’t listening that day, the May 14 veto of General Assistance Medical Care likely came across as something about a troubled car finance company with a similar acronym. GAMC pays for no-frills health care for about 34,000 people per year whose annual incomes fall below $7,800. More than 70 percent of them are either mentally ill, chemically dependent or both.

Many, before Minnesota went out of the state hospital business, would have resided in such places. Many are just as invisible today as if they did.

Sunday’s outcome foreshadowed the session’s finale: a party-line vote; override fails; Pawlenty wins. By the morning after adjournment for the year, Pawlenty’s health care veto was already melding into the end-of-session blur. It didn’t come up at a gubernatorial press conference.

But later that day, I spoke with someone determined to keep that veto in public view. Rep. Paul Thissen, a leader in the Legislature’s health policy brain trust, is running for Pawlenty’s job.

Thissen is far from a household name, so permit an introduction: He’s 42, a Bloomington native, four-term legislator from south Minneapolis, and a Harvard and University of Chicago-educated attorney (he used to play pick-up hoops with a skinny new U of C professor named Obama). He’s a smart, serious, un-flashy fellow.

It’s too early to assess where he stands in the big DFL gubernatorial wannabe pack. But this much is clear: When the candidates at forums are asked to contrast themselves with the incumbent, Thissen will take aim at Pawlenty’s veto. Here’s a sample:

“That veto was absolutely wrong, for two reasons,” Thissen said. “We are breaking a promise that we’ve had in Minnesota for generations, that we are going to take care of those least able to take care of themselves.

“The other thing is, it’s a clear example of short-term thinking. It’s thinking we can solve problems by not paying for them, or just moving them off of government’s books. That’s just not true.”

“What the governor is doing with GAMC in marquee style puts up the fundamental debate we’ve been having for the past decade. We’ve had this notion put before us that we can keep the Minnesota we’ve always known without paying for it. That’s tied to a notion that we’re all on our own, and should be able to take care of ourselves.

“The pendulum is swinging back to the idea that we do owe obligations to each other. That is what the next election is going to be about.”

Lori Sturdevant is a Star Tribune editorial writer and columnist. She is at lsturdevant@startribune.com.

Minnesota’s hospitals, nursing homes and community clinics — already reeling from the worst recession in nearly three decades — are bracing for a new round of cuts from the state’s biggest single purchaser of health care: state government.

As legislators and Gov. Tim Pawlenty struggle to close a $4.6 billion deficit in the state budget, they are looking to trim between $400 million and $1.8 billion from projected state payments to hospitals, health plans, nursing homes and other providers.

With just a week left in the legislative session, the size of the cut was still in play as budget deliberations continued over the weekend. But with health and human services accounting for about 27 percent of the state budget — second only to K-12 education — no one doubts that excruciating cuts are in store.

“We got battered by budget cuts in 2003 and we still haven’t recovered,” said Patricia Coldwell, policy analyst at the Association of Minnesota Counties. “There is no low-hanging fruit left.”

If the worst cuts materialize, providers say:

Residents of Stearns County could see St. Cloud Hospital close its Diabetes Center, eliminating exercise and nutrition programs, and close some dialysis centers.

Uninsured residents of the Twin Cities area, unless they live in Hennepin County, could find themselves turned away from Hennepin County Medical Center, which ordinarily provides uncompensated care to hundreds of patients from surrounding counties.

Aged and developmentally disabled residents in the Duluth area could see reduced services if St. Louis County loses nonprofit firms that serve those populations.

Even Minnesotans who have private insurance could see the effect in higher premiums or larger deductibles, because unpaid costs in the public sector are often shifted to private payers.

Pawlenty and his aides say they want to limit the damage, “but the current growth in health care costs cannot be sustained,” said Human Services Commissioner Cal Ludeman. “Given our budget problems, we must act responsibly.”

Last year, the state paid roughly $7 billion for medical care and insurance, or nearly one-fourth of all health care spending in Minnesota. That $7 billion includes federal matching funds for the big public health insurance programs such as Medicaid.

Razor-thin margins

As the brawl continues in St. Paul, hospitals say they already are grappling with razor-thin margins because of fewer patients and mounting unpaid bills in the recession. More cuts, they say, mean eliminating services when they are most needed.

Since last fall, Minnesota hospitals have cut nearly 2,000 jobs, frozen or cut salaries for physicians and executives, and postponed new buildings.

Pawlenty’s proposal would directly cut $336.6 million in revenues for hospitals, according to the Minnesota Hospital Association. Indirectly, hospitals say, it would cost them another $430 million in unpaid medical bills incurred by the newly uninsured who would be dropped from MinnesotaCare but still need care. The House and Senate versions would cut between $75 million and $117.1 million from hospital payments.

Children’s Hospitals and Clinics of Minnesota, for example, would lose about $36 million over the next two years. House and Senate proposals would cut closer to $10 million. Children’s had revenue of $540 million last year, 40 percent of it from Medicaid, the state-federal program for poor and elderly patients.

“What is usually not realized is that 50 percent of Medicaid recipients in this state are children,” said Dr. Alan Goldbloom, chief executive of Children’s. “Children are the group we should be investing in. They have the biggest and longest return on investment.”

Children’s recently closed an exercise medicine program for children with chronic illnesses and cut school outreach programs. Other support services — interpreters, social workers and chaplains — would be at risk with future cuts.

For HCMC, areas at risk are mental health, dental care, HIV care and clinics, said CEO Lynn Abrahamsen.

As a safety-net hospital, HCMC derives 43 percent of its revenue from Medicaid patients. To save money after the 2003 budget cuts, it closed a therapeutic pool and a Minneapolis clinic that served mostly Hmong patients, and stopped offering dental services in Richfield.

As it is, hospital executives say, Medicaid pays only about 80 percent of the actual cost of delivering care. Hospitals make up the loss by charging private insurers and their enrollees more.

In the past, hospitals could negotiate higher prices with insurers, who would then raise premiums. But as more consumers use high-deductible insurance plans in an effort to control their premiums, they’re the ones who will face higher bills as a result of cost-shifting.

When consumers can’t pay, hospitals see bad debt rise. “That shell game has fallen apart,” said Allina spokesman David Kanihan.

Pressure on nursing homes

Nursing homes can’t shift costs to other payers because state law forbids it. A recent survey of nursing homes showed that more than one-fourth had 2008 operating margins of minus 5 percent or worse “and it will be worse this year,” said Gayle Kvenvold, CEO of Aging Services of Minnesota.

Medicaid payments for the poor are the main source of income for nursing homes, and they are likely to remain flat next biennium, although some other nursing home payments are likely to be cut.

Just as hospitals fear that health care cuts will result in more people getting care in emergency rooms, nursing homes worry that likely cuts to home-care programs will push frail people out of their homes and into nursing homes.

Said Coldwell, the analyst for the Minnesota counties group, “Some people get all upset about welfare moms. They ought to realize that — in terms of dollars and number of people — the welfare mom is your grandma in a nursing home.”

Damage to reform?

Hospital officials also worry that budget cuts could derail Minnesota’s much-touted reform efforts, passed by the Legislature in 2008. The wide-ranging reforms include coordinating care for people with chronic conditions and other services that keep them healthy and out of the hospital.

Yet those services, such as phone calls from nurses to check on patients, may not happen if finances get tighter.

Fairview Health System is working with Medica at its Eagan clinic to change the care model, breaking a large clinic into teams of doctors, nurses and aides who care for groups of patients. Fairview has committed $10 million a year over five years to reform efforts, said Fairview CEO Mark Eustis. That money is now at risk.

Despite their best arguments to legislators and the governor, health and human service providers recognize that they must endure painful cuts. The question is how damaging they will be.

For the state to cut programs that provide preventive medical care, said David Wessner, CEO at Park Nicollet Health Services, is akin to “treating diabetes by getting very good at amputation.”

By Charley Shaw, St. Paul Legal Ledger, May 18, 2009

Gov. Tim Pawlenty last week signed bipartisan legislation that addresses how communities can help their older residents stay active and engaged.

House Health Care and Human Services Policy and Oversight Committee Chair Rep. Paul Thissen, DFL-Minneapolis, said the so-called “Communities for a Lifetime” legislation is an attempt to make up for lost time in addressing the impending wave of retiring baby boomers.

“We have not as a Legislature or as a state taken the kind of action we really need to take to solve the problem that’s going to overwhelm us. This is a small step we can take in a tough budget year to start people rethinking and reframing (the issue),” Thissen said.

Communities for a Lifetime will be partnerships of cities, counties and townships that provide a list of supportive services and opportunities to their residents age 65 and older.

The bill lists several things that the partnerships should “extend” to seniors:

* Ways to contribute through volunteer service.

* Ways to participate in paid work force.

* Ways to socialize, recreate and participate in wellness activities.

* Ways to grow older where they live with access to affordable housing.

* Access to quality long-term care.

* Transportation options such as public transit.

The communities should also have health care services such as remote medical technology, nutrition programs and high-quality assisted living facilities.

The bill requires the state Board of Aging to report recommendations to the Legislature on ways communities can obtain the designation.

“It sets up a framework for defining what a community that would be livable for older people looks like in terms of housing, in terms of transportation, in terms of access to health care, in terms of volunteer activities,” said Thissen, who is planning to run for governor next year.

The Senate version of the bill was sponsored by Sen. Kathy Sheran, DFL-Mankato. Co-sponsor Sen. Julie Rosen, R-Fairmont, noted that coordinating services for the aging population in her rural district is an important way to help the overall community. The largest city in Rosen’s southern Minnesota district has 11,000 people. As much as 26 percent of the population in her area is 65 or older.

“Something like this will actually insure all the resources are working together. Instead of having a resource here and a resource there,” Rosen said.

Thissen emphasized that communities need to have some coordination in their approach to serving the aging population.

“We really aren’t doing what we need to do to start planning. Part of it is just awareness-raising for people about the implications of a rapidly aging population. And part of it is to spread best practices from community to community. There is some planning go on, but there is no coordination of it,” Thissen said.

In the future, Thissen plans to continue to press for legislation that addresses issues with the aging population.

Thissen introduced legislation this session that would create a long-term care trust fund. Thissen’s bill, which didn’t advance this session, would offer long-term care benefits similar to the federal Social Security system.

“Basically right now our system (makes you) spend yourself into poverty and we need to change that,” Thissen said.