By Emily Monacelli, Truth Staff
emonacelli@etruth.com
The county's community hospitals will have to tighten their belts for 2010 as they face approximately $900,000 in state funding cuts.
The Family and Social Services administration announced Tuesday it will cut $10 million from its 2010 statewide budget by reimbursing hospitals less to care for Medicaid patients, the Associated Press reported this week.
That equates to cutting about 5 percent from each Indiana hosptial. At Elkhart General Hospital, that means $600,000, said Kevin Higdon, vice president of finance. At Goshen Health System, that means $300,000 less, said Amy Floria, chief financial officer.
"It's not a high paying program to begin with, so when it gets cut even more it tightens an already tight wallet," Floria said.
Medicaid patients make up about 8 percent of patients at both Elkhart County hospitals. Goshen is reimbursed about 18 cents on the dollar from their charges and Elkhart gets paid about 20 cents on the dollar.
In total, the administration will cut $34 million -- $10.6 million will come from giving hospitals less money for Medicaid patients; $13.6 million will come internally by not filling vacant jobs in the administration and $9.8 million will come by eliminating and capping some programs and negotiating lower rates with vendors.
Gov. Mitch Daniels announced the cuts last week after the state's tax collections fell $309 million short for the first four months of the fiscal year.
Both Floria and Higdon said they don't forsee cuts in patient services or staffing because of the funding shortage, but rather the hospitals will probably have to hold off on purchasing new equipment.
Floria said she doesn't think the cuts will affect any new services rolling out in 2010.
Higdon said EGH typically spends $20 million a year in purchasing new technology, but sliced that in half in 2009 because of the state of the economy.
"I don't forsee any cuts in any services or anything else just because of this," Higdon said. "It will make it tougher to generate profitability. In light of the economy and everything else, our profitability will be smaller anyway."