Health care costs could grow under new state budget Proposed cuts in Medicaid would hit city residents hardest

October 11, 1991|By Peter H. Frank

Marylanders would pay more for health insurance and hospital care if the General Assembly approves proposed Medicaid cuts that would force rate increases at all hospitals in the state.

The reduction in state Medicaid payments, which would hit Baltimore residents the hardest, could add up to $245 to the cost of the average hospital stay.

The projected rate increases, as high as 4 percent for at least one city hospital, come on top of an expected increase in overall hospital expenses of more than 5 percent this year.

The newest increases, which would average 1.25 percent at all hospitals statewide, would be needed to make up for $50 million in medical reimbursements that would be cut from the state Medicaid program under the leading budget scenario being considered in Annapolis.

"This was a program that was funded previously through sales taxes and income taxes paid for by people all over the state of Maryland," said John M. Colmers, executive director of the Health Services Cost Review Commission, which oversees hospital rates in the state. "What we have here now is that payments are going to be made by a relatively few people going into a small number of hospitals largely in Baltimore City."

Church Hospital, a 216-bed hospital at Broadway and Fayette streets, would need the largest percentage increase to cover the lost revenue provided by Medicaid. "What this effectively means is that all other patients who use our hospital will have to pay an extra 4 percent," said Paul A. Sokolowski, treasurer of the hospital.

TC Bon Secours Hospital would see the second-largest increase, with a 3.6-percent rate increase, while the rates at Liberty Medical Center and the University of Maryland Medical System would rise 3.4 percent. The average cost for each admission at the University of Maryland, already saddled with the highest average cost because of its large number of trauma cases, could rise nearly $245, according to state figures.

Blue Cross and Blue Shield of Maryland warned that any increase in hospital costs would be passed along to its subscribers in the form of higher rates. Based on the amount it pays each year in hospital costs, the insurer would pay between $6 million and $10 million more if the Medicaid cuts go through.

"It's really a different way of taxing the citizens actually -- or at least the premium-paying citizens," said Dr. Daniel T. McCrone, president of Maryland Medical Services, a division of Blue Cross.

As proposed, the Medicaid cuts -- coming as part of a plan to trim the state budget by $450 million during the current fiscal year -- would only affect inpatient hospital care. Reimbursements for outpatient care, emergency room visits and outpatient surgery would continue to be covered, Mr. Colmers said.

But under the system now in place in Maryland, all hospitals share the cost of patients who are treated but cannot afford to pay for medical care. Rates at each hospital are adjusted upward by Mr. Colmers' commission to cover more than $270 million worth of care provided each year for which patients do not pay.

The state Medicaid program provides medical care and other assistance to the state's poor and disabled. Much of the program is paid for jointly by the state and federal governments and would not be affected by the proposed cuts.

However, the state itself spends between $70 million and $75 million on hospital stays for people not covered under the federal guidelines. If this program were eliminated, it could save the state about $50 million over the rest of the current fiscal year, which ends June 30.

Hospital rates after Medicaid cuts

If cuts are made to the Medicaid system, $50 million in costs could be passed along to patients during the remainder of this fiscal year. Hospitals with the greatest percentage increase and the increase in cost to patients for an average stay:

Hospital ... ... ... ... rate increase ... ... ... ... increase per stay*

University of Maryland Medical System ... ... ... 3.4% ... ... ... $244

Church Hospital ... ... ... ... ... ... ... ... ... 4 ... .. .. .. $198

Liberty Medical Center ... ... ... ... ... .. .. 3.4 ... ... .. .. $198

Bon Secours Hospital ... ... ... ... ... .. .. .. 3.6 ... .. .. .. $180

Francis Scott Key Medical Center ... ... ... .. .. 2.7 ... ... ... $144

Maryland General Hospital ... ... ... ... .. .. .. 2.1 ... ... ... $115

Johns Hopkins Hospital ... ... ... ... ... ... .. 1.6 ... .. .. .. $108

Mercy Medical Center ... ... ... ... ... ... ... ... 2 ... ... ... $87

Prince George's Hospital Center ... ... ... .. .. 1.6 ... .. .. .. $81

Statewide average ... ... ... ... ... ... ... ... 1.25 ... ... ... $56

*Based on 1990 figures, the most recent data available.

Source: Health Services Cost Review Commission

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