editorials

"Meaningful health care reform and important cost savings." That was Republican Gov. Tim Pawlenty's claim about the deal he struck with DFL legislators one week ago to sustain health care coverage for the poorest Minnesotans, through General Assistance Medical Care (GAMC).

At a Senate hearing Thursday, that boast was contradicted by representatives of a number of the state's hospitals and medical professionals. "I'd caution you not to refer to this as reform," said Dave Renner of the Minnesota Medical Association. "This bill is nothing more than a significant cut in payments."

The cut the negotiated proposal contains is very real. A program that was set to cost taxpayers $380 million in fiscal 2011, before Pawlenty vetoed it last May, has been whacked to a proposed $135 million. Hospitals will see payments slashed from $219 million to $91 million. Providers who serve GAMC patients will see a 63 percent cut in rates that were already about a third of what private payers are charged for the same medical services.

The risk is that even with the best efforts of dedicated professionals, the money won't be enough. Hospitals that become CCOs will be magnets for poor sick people who will no longer be able to receive care anywhere else. Those hospitals could have no choice but to cut services, lay off employees and push costs onto privately insured Minnesotans -- the same ill effects that legislators trying to restore GAMC after its veto set out to avert.

One major hospital, SMDC Medical Center in Duluth, asked legislators on Thursday to reject the negotiated deal. Mike Mahoney of St. Mary's Duluth Clinic said a host of providers in St. Louis County had been paid about $19 million per year to serve the poor under the old GAMC. The new arrangement would allot SMDC just $2 million to treat the same population.

Other major hospitals were more open to accepting the challenge of the GAMC deal. It beats the alternative of no GAMC program at all, their representatives said.

Those hospitals are choosing wisely, given that the only politically viable choices that appear to remain for GAMC are a big funding cut accompanied by payment redesign --or a bigger cut without it. But health care providers are right to question how deep spending cuts can go before they defeat the goals of public policies. In this budget-slashing legislative session, that's a question that applies to more than GAMC.