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Longview hospital chiefs decry Perry's stance on health care expansion

By Mike Elswick
July 10, 2012 at 11 p.m.

Gov. Rick Perry's decision for Texas to opt out of health care expansion could have as much as a $90 million impact every year on revenues at Longview's Good Shepherd Medical Center, according to the hospital's chief.

Ed Banos, president and CEO of Good Shepherd, on Tuesday said the decision by Perry to reject much of the Affordable Care Act's expansion of Medicare and Medicaid could be devastating to hospitals such as his, which serve a large number of uninsured and people covered by those government programs.

"For Good Shepherd, about 18 percent of our patients fall into that category," Banos said. "The true cost to us is more than $90 million a year - that's not what the charges are - that's the actual cost to us."

Banos said if adjustments are not made somewhere in the process as outlined by state and federal officials, costs and services will likely have to be trimmed.

"We'll have to look at cutting costs," he said. "And we may have to cut back on some of the services that we're now giving away."

In the past, Good Shepherd Medical Center has received about $10 million in federal funds annually to help offset its disproportional share of bearing such a large share of Medicare, Medicaid and uninsured patient care. The hospital also receives about $850,000 from Gregg County annually for indigent care, "but that's just a drop in the bucket," Banos said.

"If we lose that, then Good Shepherd could really be hurt," he said. But the real effect will be on those patients without health insurance or the financial means to pay for needed medical care.

"We can't forget the patient who's not going to be able to pay regardless," Banos said. "This is making it very hard to get quality health care."

Hospitals in general have supported the Obama administration's Affordable Health Care Act because it contained language they could accept. The law would provide coverage to millions of uninsured Americans while also cutting government payments to hospitals.

Banos said hospital administrators from across the state plan to continue to let Perry know of their concern on his stand. Banos said hospital operators understand the high cost for the state, but they also have major concerns for their own bottom lines and their ability to continue providing health care to those people needing it.

Jim Kendrick, president and CEO of Longview Regional Medical Center, said the hospital plans to continue providing services to more people as medical coverage expands under the Affordable Care Act.

"However, without expansion of our state's Medicaid program, millions of Texans will continue to lack access to affordable care and preventive health services," Kendrick said. "The state's hospitals will also continue to bear the burden of uncompensated care as they provide emergency treatment for the uninsured."

The Affordable Care Act requires the federal government to provide 100 percent of the funding for the Medicaid expansion in 2014 through 2016 and more than 90 percent of the funding in the following four years.

If Texas does not expand its Medicaid program, those federal funds will go to other states, Kendrick said.

"Texas must find sustainable solutions that can expand coverage for low-income residents and keep our state's hospitals strong for the communities they serve," Kendrick said. "We look forward to working with the governor and members of the Texas Legislature on these important issues."

In a letter Perry sent to U.S. Health and Human Services Secretary Kathleen Sebelius, he said the Medicaid and Medicare stipulations "represent brazen intrusions into the sovereignty of our state."

Texas has the highest uninsured rate in the nation, with about 6.2 million residents - a quarter of the state's population - lacking health insurance.

"I will not be party to socializing health care and bankrupting my state in direct contradiction to our Constitution and our founding principles of limited government," Perry said in a statement.

The Supreme Court upheld most of the federal health care law this past month, although it said the federal government can't withhold states' entire Medicaid allotment if they don't expand Medicaid, the health insurance program for the poor and disabled. If states choose not to set up a health care exchange, an online service for people to comparison shop for insurance, the federal government will establish one for them.

Perry's statement said expanding Medicaid would add millions of people "into the already unsustainable Medicaid program, at a potential cost of billions to Texas taxpayers." The Texas Health and Human Services Commission has estimated the Medicaid expansion would cost the state $27 billion in the first 10 years, a number many Democrats dispute.

Texas Hospital Association President and CEO Dan Stultz said hospitals agree with Perry that the Medicaid program is "severely flawed," but he added that "without the Medicaid expansion, many will remain uninsured, seeking care in emergency rooms, shifting costs to the privately insured and increasing uncompensated care to health care providers."

In published reports, Stultz said that with "a strained budget, it's hard to imagine addressing the uninsured problem in Texas without leveraging federal funds."

<em>- The Associated Press contributed to this report.</em>



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