Health care and higher education are both looking at steep budget reductions next fiscal year. And just as Chancellor Michael Martin and LSU System President John Lombardi have spoken up about the effects a $219 million funding reduction would have on public colleges, universities and the state in general, health care officials are spreading the word about the cuts House Bill 1 dealt them. “[The effects] would stretch throughout the entire state, very similar to what is being thought about in higher education,” said John Matessino, president of the Louisiana Hospital Association. “There would be layoffs all over.” HB 1, the state’s $28 billion state spending proposal, has hospitals taking a $200 million cut in reimbursements they receive for providing care to the state’s poor through the Medicaid health insurance program. The funding reduction is to help make up for an expected $1.3 billion state revenue shortfall for the fiscal year that starts July 1. The cuts to Medicaid would result in about 4,000 layoffs statewide, according to data collected by the Louisiana Hospital Association. The Baton Rouge area would suffer 564 layoffs if the $200 million cut goes through, and Baton Rouge General alone would have to endure a $6.1 million reduction in their Medicaid reimbursement. But last week, the State Senate Finance Committee restored 75 percent of the Medicaid cuts, which leaves health care with $90 million in major reductions to deal with, said Michelle Clement, spokeswoman for the Louisiana Hospital Association. The 75 percent restored would still leave Louisiana facing about 2,000 layoffs, though. “HB 1 will now go to the full House for concurrence, and the bill will most likely end up in Conference Committee,” Clement said in an e-mail to The Daily Reveille. “The House could strip away everything the Senate put back in or they can restore the cuts 100 percent … We will have to wait and see.” Matessino said Senate Bills 1 and 2 could help health care and higher education the most. Backed by Gov. Bobby Jindal, the bills would make it easier for the state to balance the budget using certain dedicated funds without having to dip so deeply into health care and higher education’s budgets. The state constitution currently leaves health care and higher education the most vulnerable during financial downturns because most other funds are not susceptible to cuts. The bills would allow the state to dip into those dedicated funds up to 10 percent, instead of the current 5. “That’s something that’s got to happen,” Matessino said. “We have to take the pressure off higher education and health care.”Matessino said Medicaid is already under-reimbursed, with Louisiana hospitals only receiving 83 cents for every dollar they use for Medicaid. He said a funding cut as large as $200 million would drop hospitals down to their 1988 level of reimbursement. Many health care leaders have expressed the importance of Louisiana hospitals to the state’s economic development. The health care industry employs the largest amount of people in the state, said Paul Salles, chief executive officer of the Metropolitan Hospital Council of New Orleans at a State Capitol news conference in late May. He said the health care industry is important to economic development and has a $7.8 billion payroll and more than 250,000 employees.
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