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Continued: Health care facing budget scalpel again, with some relief

  • Article by: CHEN MAY YEE , Star Tribune
  • Last update: June 17, 2009 - 12:05 AM

Health care services for poor Minnesotans have been a familiar target in Gov. Tim Pawlenty's austerity exercises over the years, and they found themselves under the scalpel again Tuesday.

Nevertheless, health care executives, who have been bracing for deep new cuts since the Legislature adjourned, said the governor's cuts could have been worse.

On Tuesday, Pawlenty said health and human services will come in for $236 million in additional cuts as part of his unallotment strategy. The list of about 20 cuts to health services includes:

• Eliminating one program for the poor, General Assistance Medical Care, six weeks sooner than expected, saving $15 million. GAMC will now go away on March 1, 2010.

• Suspending General Fund payments to the Transitional MinnesotaCare insurance program, replacing them with money from the Health Care Access Fund.

• Reducing hours for personal care attendants, who serve fragile and disabled people, from a maximum of 310 hours to 275 hours per month.

Pawlenty noted he was proposing no new payment reductions for primary care doctors and clinics, and no additional cuts in Medicaid reimbursements to hospitals that serve a large number of poor patients. "I don't want to suggest there are no impacts to hospitals," Pawlenty said. "But they are not going to be as large as they had feared."

The cuts will take effect starting July 1.

The governor has consistently said -- and not in an admiring way -- that Minnesota has among the most generous public health programs in the country. Health and human services account for about 27 percent of the state general fund budget.

But after a month of suspense, "we feel pretty good about this," said Lawrence Massa, president of the Minnesota Hospital Association. "We are pleased our message that hospitals have been cut deep enough has been heard."

However, hospitals that serve the poor, such as Hennepin County Medical Center, will be disproportionately affected. HCMC will be hard hit by additional rate cuts for nonprimary care -- which includes emergency room, laboratory and radiology services -- as well as a temporary suspension of additional payments for dental care in Medical Assistance, said Mike Harristhal, vice president for public policy. It will also lose money when GAMC disappears.

All in all, HCMC expects an additional loss of $6.3 million over the two years. HCMC will review services to see what can be cut, consolidated or outsourced. The reduction "isn't something we can accommodate without reducing the breadth or depth of our services," Harristhal said.

The governor also proposed freezing nursing home payments for fiscal year 2010. The Legislature had already frozen rates for 2011 to 2013.

"This means it will be a four-year rate freeze," said Kari Thurlow, vice president of advocacy for Aging Services of Minnesota, a trade association. To cope, she said, nursing homes may have to lay off workers or delay investments in building.

Still, she said, a freeze is better than a rate cut.

Chen May Yee • 612-673-7434

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