Florida hospitals face more pressures with Medicaid cuts

Florida hospitals have faced cost pressures that have challenged their abilities to provide services in recent years.

The looming cuts in Medicaid programs aren’t going to help matters, says Mary Mayhew, president and CEO of the Florida Hospital Association.

Hospitals have already received insufficient payments for caring Medicaid patients for years, Mayhew tells Chief Healthcare Executive®. Now, millions are projected to lose Medicaid coverage over the next decade, as caps in taxes to finance Medicaid programs and new workforce requirements take effect. States will be faced with difficult decisions, such as raising other taxes or reducing the number of people who are covered with Medicaid.

“The magnitude of this bill as it relates to Medicaid, is unprecedented,” Mayhew says.

“This was not a health care bill. This was a tax bill that used these cuts in Medicaid to fund the expiring tax cuts. I think for Florida, there are aspects of the proposal that have a bigger potential impact in the next few years.”

The workplace requirements for Medicaid won’t take effect until 2027. For now, she says she’s “relatively comfortable” that there won’t be dramatic consequences to Medicaid cuts.

But she says the changes only add to the financial challenges for Florida hospitals, as they will likely see more patients without insurance and any ability to pay.

(See part of our conversation in this video. The story continues below.)

Medicaid misunderstanding

In addition to leading the Florida Hospital Association, Mayhew has experience leading state Medicaid programs in Florida and Maine.

In the debate about the tax package and its changes to Medicaid programs, Mayhew says she was disappointed about narratives suggesting states were using provider taxes and state-directed payments improperly, driving waste in those programs.

Mayhew says she was frustrated that Congress didn’t engage in a thorough examination of Medicaid programs and whether those in need were truly being served and how taxpayer dollars could be used to deliver the best results.

“Those should not be mutually exclusive,” she says. “We can have a fiduciary responsibility to the taxpayer. We should also be able to produce great results. You know, having overseen Medicaid programs in both Florida and in Maine, I am frustrated that we're not really creating the kind of accountability in terms of the Medicaid managed care structure and the administration by the insurance companies.”

She points to patients with mental health needs, such as schizophrenia, who aren’t getting the help that they need.

“When I see individuals with schizophrenia, constantly trapped in the revolving door of the emergency department, an incredibly expensive point of entry to the health care system, not in the best interest of that individual, when we know it costs pennies on the dollar to do medication management for that individual with schizophrenia,” she says.

Headed to emergency rooms

Some Florida hospitals have had to scale back or shutter programs in recent years, partly due to inadequate support from Medicaid.

“We've had labor and delivery units close. We've had inpatient psychiatric units close. Those are both dominated by Medicaid as the payer. They're both grossly underfunded. We get reimbursed 48 cents on the dollar of cost for labor and delivery,” she says.

Hospitals and health systems have denounced the Medicaid cuts, which they say undercut the Trump administration’s stated goals of keeping Americans healthy.

If fewer people have insurance, they won’t have access to primary care physicians. Many of those patients will end up in a hospital emergency department at some point, she says.

“We have OB-GYN deserts in Florida,” Mayhew says. “We have challenges with families and children and adults getting access to community-based mental health services. When individuals don't have access to their services, they inevitably end up in the emergency department, either because their situation has deteriorated or because they are seeking primary care in the emergency department. That is true and has been true for a very long time.”

Mayhew says she’s disappointed that some policymakers don’t recognize the cost pressures on hospitals.

“What is frustrating is the lack of understanding of what hospitals and health systems are trying to piece together and maintain and preserve in their communities,” she says.

Critics point to independent imaging centers that can charge lower prices for MRIs, but Mayhew says that’s ignoring the other responsibilities of hospitals and health systems.

“They're not delivering babies,” Mayhew says. “They're not accepting involuntary commitments of individuals with mental illness. They're not having to subsidize physician practices to preserve access.”

“It's a lot more complicated for me to have to explain all the perverse structures that exist in hospitals and health care in order to address community health needs. It's a lot easier to just say you guys are more expensive, without anyone trying to understand the long-term consequences for population health and improving health care outcomes,” she adds.

Mayhew says she remains hopeful that since some of the Medicaid cuts will be phased in over time, that lawmakers and the Trump administration may make changes to avert some of the problems hospitals are expecting.

“I am optimistic that there may be an opportunity to reevaluate some of these proposals that down the road could further erode this safety net program,” Mayhew says.

Florida hospitals have also been pressing Congress to extend the tax credits in the Affordable Care Act, which is at the heart of the federal government shutdown.

Those tax credits help Americans buy insurance on the Affordable Care Act marketplace, but they are slated to expire at the end of the year. With insurers projecting significant price hikes, many won’t be able to afford insurance.

As many as 1 million Florida residents may not be able to afford health insurance, due to “skyrocketing increases in their monthly premiums,” Mayhew says.

“I'm hoping that we can get through some of the political noise about this and extend those tax credits,” she says. “That's a huge priority for us in Washington right now.”