With more than two-thirds of the state’s hospitals operating in the red and 14 of them predicted to deplete their funds this year, Birmingham-area hospitals are asking for help.
The hospitals recently sponsored an advertising campaign addressing the impact of Medicare reductions included in the Balanced Budget Act (BBA) and to solicit help of local citizens in contacting Congress.
“Hospitals all over the state are going public with this message,” said Warren Callaway, president of the Alabama Hospital Association’s (AHA) Birmingham Regional Council. “Birmingham-area hospitals are just taking it one step further, hoping that they can generate the type of public outcry necessary to make Congress take action to provide some additional relief.”
Small, rural hospitals are experiencing the hardest hits, but the effects can still be felt at the larger facilities as well, said Dennis Hall, president and CEO of Baptist Health System (BHS). Of the 11 hospitals operated by BHS, Hall said seven are operating In the red, and unless changes are made soon, the downward spiral of care will continue to take its toll.
Community hurting
One of the hardest hit areas is a facility in Centre in Cherokee County, Hall said.
“The community really needs access” to reliable health care, he said, noting the nearest facility is about 45 minutes away. The facility would have already closed if it was not connected with a larger system like BHS, which has been able to maintain operations. But with cutbacks still in the future, Hall said the entire system will be experiencing the backlash.
All of BHS’ administrators are meeting with local leaders and spreading the word with employees about how they can help.
The sad truth is “most of us don’t think about health care until we’re sick,” Hall said. But by then it might too late, he added.
The Birmingham group decided to put the pressure on early, since the final budget will probably not be approved until the end of September, said Rosemary Blackmon, AHA’s public relations vice president.
“In trying to find a way to balance the federal budget, Congress decided that on average the nation’s hospitals were making too much money caring for Medicare patients,” said Callaway. “Unfortunately, at the time Congress passed the BBA, hospitals in Alabama were making significantly less than other hospitals in the nation. And when Congress made across-the-board reductions in Medicare payments, it hit Alabama’s facilities extremely hard.”
And more cuts are coming in the next two years unless people alert their congressional representative, she said. Even though the “meat and bones” of the budget has already passed, Congress still has more work to do.
Callaway said the state’s hospitals started with an average operating margin in 1997 of about 2 percent. Nationally, the average margin was 16 percent. The numbers come from a study commissioned by the Alabama Hospital Association by Deloitte Consulting.
Project leader Mark Hopkins said the state’s hospitals are some of the most efficient in the Southeast, but the low operating margins are hurting the hospitals.
“If hospitals cannot make enough money to cover their expenses, they’ll have to cut services or downsize their staffs,” Hopkins said. “We know that many hospitals will close and that those who remain open won’t be able to replace aging equipment or properly maintain their buildings.”
The growing number of uninsured, as well as the poor health of residents, will also exacerbate the problem. Uninsured rates increased by 21 percent from 1996 to 1997 and 10 percent from 1997 to 1998.
Rick Derrick, director of public relations at Baptist Health, said the most effective way they’ve found of getting the word out is through in-house publications, as well as meeting with groups in the community. The employees of Baptist Health are currently involved in a letter-writing campaign. The staff sent about 2,000 letters in two weeks to argue their cause to their legislators. With five hospitals, two nursing homes, three outpatient facilities, a retirement community and several primary care centers, Baptist Health is just starting to feel the affects of the BBA, he said.
Derrick said the system is weighing consolidating or cutting back some services to help defray the rising cost of serving the public’s health care needs.
According the National Vital Statistics Report, Alabama ranks in the top half for prevalence in five out of the nine leading causes of health-related deaths in the United States. The state’s infant mortality rate is also higher than the national average.
Many people think Congress fixed the problem when it passed the BBA relief bill last fall,” Callaway said. “But according to our calculations, the small amount of money put back into the Medicare program only covers about 5 percent of the amount of money lost by Alabama’s facilities. Most hospitals probably won’t notice any relief.
“We’re asking Congress to go back to the drawing board and provide some additional relief before it’s too late. The sad thing is that most Alabamians won’t know this is happening until they show up at the hospital one day, and it has stopped offering a particular service or worse yet, closed. In a time where there’s a budget surplus, it’s a shame that Congress is pulling the rug out from under Alabama’s health care infrastructure.”
The AHA set up a toll-free number, 1-800-644-5161, to help people contact their representative. Or you can visit the AHA Web site, www.alaha.org, to e-mail your legislator.
(AHA, Dianna L. Cagle contributed)
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