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Houston County Courier - Local News

Copyright 2011 - Polk County Publishing Company

Medical centers evaluate economic issues, strive to maintain quality care
Houston County Courier

By Lynda Jones
Managing Editor

Much has been publicized about how state Medicaid cuts may impact services offered by certain medical providers. State budget formulas are complicated at best. Understanding bond ratings and financial outlooks for businesses can be challenging as well, especially as they pertain to healthcare systems (hospitals, for example). Bond ratings for businesses can be compared to an individual’s personal credit score. Instead of numbers, letters are assigned. AAA is the very best, or a prime rating. BBB- to BBB+ ratings are considered a medium grade. Ratings of C to CCC+ are considered extremely speculative (risky). According to the Center for Public Policy Priorities (CPPP), Houston County stands to lose approximately $16 million in Medicaid funding for 2012-13. The CPPP explains one component of the 2012-2013 loss includes a 10 percent provider rate cut that would leave Houston County with four million dollars budgeted to pay for providers through Medicaid. The Medicaid cuts will become effective Sept. 1. The Houston County Hospital District Board of Directors last month discussed the notion of looking at hospital systems other than East Texas Medical Center. The discussion appeared to be sparked by a report published by BusinessWire.com citing a Fitch Ratings report about ETMC. The Houston County Courier contacted area medical centers/hospitals, including ETMC, to compare area medical facilities. Each organization was asked the same questions regarding information about current bond ratings/financial outlooks, annual reports and how Medicaid/Medicare cuts are affecting them. Trinity Mother St. Francis in Tyler did not respond. Kristi Gay, Chief Financial Officer for Memorial Health System of East Texas, reported, “Our most recent ratings from June 2010 are Baa2 by Moody’s and BBB by Standard and Poor’s. We expect updated ratings within the next month.” Christine Rutherford, ETMC spokesperson, stated that ETMC’s bond rating was affirmed in April by Fitch Ratings at BBB. This information was unavailable from Palestine Regional Medical Center. A spokesperson at Palestine Regional Medical Center said their services that are impacted most by Medicaid are labor/delivery and psychiatric care. At this time, they are analyzing their lines of business, but do not expect to cut services in these two areas. The Palestine spokesperson also stated the formulas for Medicaid reimbursement differ between hospitals that are considered “critical access” hospitals (those which stand alone and are not near any other hospitals), “community hospitals” which are a certain distance from certain other hospitals, and other hospitals. This means ETMC Crockett may not be affected by Medicaid cuts as much as hospitals in Tyler which are close together. Gay discussed the effects of the economy on Memorial Health System of East Texas. She stated, “There are more people without jobs and without insurance coverage who still need good medical care. We continue to see negative financial issues related to the down economy. “Many employees have higher deductibles and co-payments and are less able to pay their portion of the hospital bill.” Gay continued, “It is a challenge now to provide medical care for less cost than Medicare and Medicaid reimbursement. We are working diligently to reduce our costs in anticipation of further reductions from Medicare and Medicaid without affecting the high quality of medical services we provide to our community.” Rutherford concurred that “these are challenging economic times.” Like other healthcare systems, she said, ETMC also “has spent months anticipating and planning appropriate responses to reductions in commercial insurance reimbursement and state and federally-funded health programs (i.e. Medicaid and Medicare).” According to Rutherford, “Because of the overall economic downturn, we have seen increasing numbers of East Texans who no longer have health insurance. For example, 27 percent of patients seeking care at the ETMC Crockett emergency department have no insurance coverage, yet they are provided care at no charge or at greatly reduced charges, through ETMC’s indigent healthcare program.”


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