Hospitals fear cuts Paterson proposed

Staff and wire reports

ALBANY - A health care industry group's warning that medical services in New York would be cut and access to treatment would be more limited if Gov. David Paterson's proposed budget cuts for Medicaid and health care are enacted was echoed by local hospital officials.

The Hospital Association of New York State issued data Sunday showing that Paterson's proposal would cut more than $771.5 million from hospitals in the next two years, including nearly $2 million from Nathan Littauer Hospital in Gloversville, and St. Mary's Hospital and Amsterdam Memorial Hospital in Amsterdam combined.

''We're making these deep cuts, and since 60 percent of the cost of the hospitals is staff, and since we already have a staff shortage, there's literally no way to accommodate this unless you cut services,'' HANYS President Daniel Sisto said. ''We need to find out what services would be reduced.''

The new data offer a breakdown of losses by region, and includes how much individual hospitals would lose. Nathan Littauer would lose $742,000 over the next two years, St. Mary's would lose more than $1 million and Amsterdam Memorial would lose $163,000, according to the association.

Amsterdam Memorial Hospital spokeswoman Rana Huber said any such cuts would be "devastating" to Amsterdam Memorial. She said Amsterdam Memorial's cuts would be substantially higher than what HANYS has predicted because of the patients the hospital cares for in its Wilkinson's Residential Facility.

"We would be concerned these [cuts] would impact our ability to provide care," she said. "Hospitals across the state are already either losing money or just barely breaking even, and this certainly isn't going to help. Hospitals should be spending more time battling illness."

Nathan Littauer spokeswoman Sue Kiernan said the existence of the hospital's nursing home facility would add nearly $400,000 to the cuts, bringing Nathan Littauer's potential losses over a 16-month period to $1.1 million. She said hospital officials expect the number could be closer to $1.5 million, due to Medicaid reimbursements.

"This is serious," she said. "We don't have a contingency plan for a cut this big."

Kiernan said she understands the state's fiscal woes but feels hospitals are being unfairly targeted.

"We feel this is a disproportionate amount of cuts from hospitals and nursing homes," she said. "If these cuts go through, it could mean layoffs across the state."

Paterson spokesman Jeffrey Gordon says the state Division of Budget is still reviewing the numbers released by the hospital association.

''Governor Paterson has said that the only way to overcome this unprecedented crisis is through shared sacrifice, and he proposed a plan that reduced spending in virtually every area of the state budget,'' Gordon said. ''The savings he proposed in hospitals represent only one-half of one percent of the hospitals' revenues.''

New York City hospitals alone would lose $505 million in the next two years, and $121.7 million before the end of this fiscal year March 31. The association put together the report to inform hospitals around the state of what they could expect to lose if Paterson's recommendations go into effect. The hospitals are expected to report back to the association with plans for what they would cut.

Paterson's proposal would cut reimbursements to hospitals in Medicaid, a double whammy because the federal government matches every Medicaid dollar. So for every dollar the state cuts, hospitals lose two, Sisto said.

New York spends $2,283 per person on Medicaid - more than any other state in the country and more than twice the national average of $1,026. Despite the cuts, Medicaid spending would still grow 1 percent - $144 million - from the 2007-2008 fiscal year to the current fiscal year. Paterson's plan would set total Medicaid spending at $15.3 billion.

The midyear cuts are particularly challenging for hospitals because they have already planned their budgets for the year, Sisto said.

''We've already provided [pay] increases to the nurses, pharmacists and staff at our institutions,'' he said. ''So we can't go back and take those costs out. There's no way at this point in the year to adjust for cuts of this magnitude.''

The HANYS study only reflects the $771 million in cuts to Medicaid fee-for-service programs. Millions more would be cut from managed-care programs. Data on their cost and proposed savings were not yet available.

Leader-Herald reporter Kayleigh Karutis contributed to this report. She can be reached at gloversville@leaderherald.com