To fix budget, gov. cuts healthcare spending

Published 7:00 am Friday, April 1, 2016

In an effort to patch the remaining budget hole in the current fiscal year, last week Gov. John Bel Edwards announced he would cut $70 million from the budget of the state’s Department of Health and Hospitals.

In a statement, Gov. Edwards said higher education had already taken a pummeling over the years in budget cuts, so he wanted to spare them further pain.

“Higher education has suffered the deepest budget cuts of any higher education system in the country over the last eight years — more than $700 million. In addition to that, we are asking them to fund $28 million for TOPS scholarships this year that will come directly out of campus budgets,” Gov. Edwards said in the release. “Therefore, at my direction, DHH has taken a sharp pencil to its budget, scrutinized its spending patterns closely under our first full year of our new private-insurance style Medicaid program, and found ways to make some very painful cuts. We are grateful, too, that our public-private safety net hospital partners came to the table, willing to work with us for the good of our Louisiana citizens during this difficult time.”

How this could affect Washington Parish hospitals isn’t yet clear — and Our Lady of the Angels CEO Rene Ragas did not provide comment by press deadline — but most of the cuts will come from the private-insurance Medicaid payments the governor mentioned.

Mike Thompson, a spokesperson for the state’s hospital association, said, “His plan for the remaining fiscal year would reduce funding for each contracted public-private partnership hospital by 1.5 percent, for a total estimated cut of $18.5 million. It would also lower capitated payments to Bayou Health plans by an estimated $27.2 million. Both of these estimates include projected reductions in federal matching payments. In addition, the plan would save an estimated $27.5 million by refinancing payments to public private partners under a different federal matching rate.”

As the state still faces a $750 million shortfall for the next fiscal year, it’s likely these cuts will not be temporary, although Edwards has not laid out his plan for fixing next year’s budget yet.

“In April, Gov. Edwards is expected to release a plan to address next year’s $750 million shortfall,” Thompson said.