Government cuts affect services in hospitals

"Each year, they cut. And then the next year, they cut again," said John Owens, vice-president for finance at St. Clare's Hospital in Schenectady. The hospital "lost $2.9 million last year, and we probably will lose $1.5 million this year."

In response to those drastic cuts, introduced in 1997's Balanced Budget Act, Mr. Owens said St. Clare's has eliminated 20 staff positions, including two vice-presidencies and several managerial positions. The job losses affect every area of the hospital, he noted, adding that St. Clare's "since 1996 has probably reduced our overall staff by 20 percent."

Other cost-cutting measures include personal-care aides or licensed practical nurses replacing registered nurses, and even cutting back on the hours of operation of the hospital cafeteria.

In the hole

He remarked on the situation at St. Mary's Hospital in Amsterdam, which eliminated 37 positions throughout the hospital recently to combat an anticipated $3 million drop in reimbursement from Medicare, Medicaid and other insurers.

"St. Mary's is known as one of the low-cost hospitals in the area," Mr. Owens stated. "When they're struggling, it makes the rest of us wonder, `What is the future?'"

Grief over losses

The press release noted that "we must give credit for this situation to Congress, who saw fit to extract millions of dollars from the payments for services provided to patients in our community. Medicare was cut so severely for all hospitals across the country that many are struggling to survive....Every hospital in the area and across the country is facing this same scenario."

Reductions in Albany

St. Peter's would have originally lost $27 million for five years of Medicare cuts. Mr. Lang said he expects to see about $2.3 million restored. "That helps a little bit, obviously," he noted.

Because about 80 percent of St. Peter's hospital beds are filled on average and the hospital is in an area with a high population density, Mr. Lang added that "we've benefitted from a fairly high utilization of services, and we've been able to increase our outpatient services."

The main problem St. Peter's faces as a result of the Medicare cuts, he said, is "not being able to do more of what we want to do, as opposed to cutting back on what we are doing. The opportunity to meet the needs of the community has clearly been constrained by Medicare reductions."

Effects in Troy

"It's really the long-term issue," she stated. "As you continue to whittle away at reimbursement rates, at some point, it will affect your ability to operate. We're not at that point yet."

Mr. Owens noted that for some community hospitals, including St. Clare's, decreased reimbursement may mean the hospitals have to sever ties with some HMOs.

"We have to rethink the arrangements we have; and if they're not profitable, we'll have to give them up," he said. "It's not a happy picture."

(12-02-99) [[In-content Ad]]