Do we have a responsibility to help Virginia’s hospitals as engines of economic opportunity and providers of critical services?
Last week, we heard several floor speeches exploring whether, how, when, and under what conditions we can expand health care coverage to up to 400,000 uninsured Virginians. I am optimistic that we can find a way — a Virginia way — to enact the reforms and provide the assistance that so many of our citizens need, and am heartened by the deliberate and thoughtful approach we are taking in this complex debate as it unfolds.
The gentleman from Augusta said last week that we should be mindful of the future. I agree. But I hope that our concern for the future will not prevent us from confronting what is before us and developing the best possible solution.
Today, I would like to focus on one piece of our challenge — our hospitals.
Last Thursday, the gentleman from Suffolk discussed the impact of federal cuts on our hospitals. He was right when he said that the federal Medicaid cuts do not hit until 2015. But there is much, much more to this story. And this chart shows it. I have copies for anyone who wants it.
This chart shows — loudly and clearly — that the biggest challenge to our hospitals is not being created by Medicaid cuts – the green lines you can hardly see on this chart. The problem is the Medicare cuts from the ACA, in blue, and the sequester, in red — a total of $207M in Medicare cuts in 2014, rising to $393 M by 2016 and $540 M by 2018. This is what is affecting our hospitals. It is happening now and will continue to happen in the years ahead.
These cuts are placing our hospitals — and the communities they serve — at considerable financial risk. Accessing additional federal Medicaid dollars is, pure and simple, an economic imperative for the hospitals and the communities they serve. Just ask your hospitals.
We can see the future — and unless we act, it isn’t very pretty.
A couple of examples:
- According to the Virginia Hospital Association, the Augusta health system located in the Shenandoah Valley has already seen its federal monies decline by $4.5M and 2015 will bring another $3.2M in losses. There is a story in the News Virginian this morning.
- Riverside Health System, with 9,000 employees serving the Peninsula, will lose another $9M in 2015 on top of $11.2M already lost.
- Valley Health, a system with facilities in Page, Warren, and Winchester, recently laid off 33 persons, and is projected to lose another $6M in 2015.
- The Fredericksburg Free Lance Star reported Saturday that Mary Washington and Stafford Hospitals project a loss of $12M in 2015.
- And we have heard about the recent closure of the Lee Medical Center in Pennington Gap in Southwest Virginia, and the loss of 140 jobs.
These are costs not just because of ACA, but also because of the sequester. There are many more stories like this from all over the Commonwealth, especially in rural communities where the economic impact of a hospital is often most dramatic.
If we do not find a way to bring our tax dollars back to Virginia, hospitals will be forced into making ‘very tough business decisions’ that will hurt employees and the economy of local communities. Bringing our tax dollars back to Virginia is a business and economic imperative. Just ask your own hospitals.
There is little doubt that the loss of federal dollars will cause an impact. The question for us, then, is: do we have a responsibility to do something about it? I submit that we do. When faced with crisis affecting the economic life of our communities, we step up. We certainly step up when there are natural disasters over which we have no control.
And we step up when our communities are affected by economic challenge caused by decisions in Washington. Remember BRAC and its initial recommendation to close down the Naval Station at Oceania. The closure would have decimated this community and rippled throughout the commonwealth.
We could have decided we had no responsibility to act because the decision was not ours. But we didn’t. We could have decided not to act because the future of the base was uncertain. But we didn’t.
Why? Because the closure of Oceania would have meant the loss of thousands of jobs and millions of dollars in economic activity.
We stepped up and invested Virginia tax dollars to make sure the federal dollars would continue to flow. Our investment is over $70 million to date – $7.5m per year. There is another $7.5 M in the general fund this year. We are doing it to keep dollars flowing through the economy, to keep our communities economically strong.
I submit that the situation today with our hospitals is not much different. We do not know the future but we know what is happening now. Right now, when our hospitals are facing huge cuts in federal support and are paying increasing costs of indigent and charity care, we are refusing $5m every single day – our money — that could be brought back to Virginia to help our citizens, our hospitals and our economy.
If we want to keep our hospitals as strong economic engines and the backbone of many of our communities, we need to find a way — a Virginia Way — to bring these Medicaid dollars back to the Commonwealth.