Local hospitals are feeling the pinch of a tight belt as they try to cope with financial losses stemming from indigent care, a key issue that the Affordable Health Care Act aims to resolve.
The federal government is reducing expenditures through Medicaid and Medicare to hospitals, says Mike Burke, Public Relations Director at Sacred Heart.
"That's something that's affecting all hospitals," Burke said. "That's why Sacred Heart had to cut expenditures."
Sacred Heart announced layoffs mainly in supportive roles, earlier this month, according to Burke. The announcement came amongst a large construction project, adding five floors and 112 beds with private rooms, to the hospital. It has been the largest expansion the hospital has seen in years, he says.
Burke said the hospital loses millions of dollars on those that cannot pay for their health care. Those costs are absorbed by the hospital and by those who do have health insurance.
"Expansion of the Medicaid program would have offset those losses," he said. "Say there's 50,000 that don't have health insurance. Say 25,000 would have qualified. More of those folks would have qualified for Medicaid."
Phillip Wright, CEO of Santa Rosa Medical Center, said they have been "tightening their belts" as well to deal with shrinking reimbursements and smaller Medicaid payouts. The hospital has been looking at ways to cut costs without sacrificing bedside service and support.
"We have restructured our (employee) benefits," Wright said. "Associates have been very understanding. We're not reducing paychecks or anything like that."
He said there are two main areas where reductions can be found. One is the cost of labor, which can account for 55% of operating costs. The other is the cost of medical supplies. The hospital has reviewed positions as people leave the staff.
"I use this example with my employees," he said. "If income is going down regularly, what would you do? Maybe you would quit going to the movie. Maybe you could reduce your cable plan. Look at what we cannot afford."
Considerations have been made if the position needs to be refilled or if the responsibilities can be consolidated with another position, he said. There are potential profit margins in supply contracts.
Wright did mention there were a few good ideas in the health care law—college children being allowed to stay on their parents insurance until the age of 26 and ensuring that people with pre-existing conditions have access to coverage.
But the positive aspects of the law came with payroll tax hikes and medical device taxes, he said. He said that additional tax will ultimately be passed on to consumers. He said lower reimbursements will place a strain on hospitals and doctors will take less Medicaid patients.
"All these people will have access," he said. "But there may not be enough physicians going forward."
Florida lawmakers voted down legislation that would expand Medicaid services to around one million residents without healthcare earlier this year, choosing not to accept federal dollars for the program.
The state had the opportunity to "opt-in early" to the Affordable Health Care Act, and it would receive $51 billion in federal dollars. Florida, along with 20 other states, rejected the federal money and early, volunteered expansion of the federal program.
Florida House Representative Doug Broxson said the state will eventually follow suit with the law enacted by President Barack Obama, but not until the law becomes mandatory.
"What we did was fiscally responsible," Broxson said. "You can't do more than what your income can handle."
Broxson said that the formula from the federal government regarding Medicaid payments has changed. He said there has been a 47% increase in Medicaid payments since 2007 in the state. He said he did not want to accept federal funding because there were too many unknowns.
"There was just an incentive to opt-in early," Broxson said. "There's just too many unknowns in the federal government—they didn't even know what they created."
Even though the legislature chose not to expand health care programs early, Broxson said that he would ensure Florida is ready to implement the health care law when it takes affect in 2015. He said he was proud that he stood on principals when it came to barring the early expansion of health care.
"It's going to be expensive," Broxson said. "It's going to cost a lot for every business and every individual."
This article originally appeared on Santa Rosa Press Gazette: Area hospitals feel the crunch of Florida's Obamacare defiance