Hospitals could feel pinch of government shutdown

06/25/2005

Martiga Lohn,
Associated Press
June 24, 2005

Officials at the tiny hospital in Cook, near the Boundary Waters Canoe Area Wilderness, are bracing for a big hole in their books if parts of state government shut down.

The 14-bed facility gets more than a third of its monthly income from patients covered by subsidized health programs — an area of the state budget lawmakers have yet to finalize. Those payments could be delayed indefinitely if July 1 rolls around without a final budget in place.

The Department of Human Services says it would stop paying hospitals, clinics, health plans and dentists during a shutdown and catch up once the Legislature passed a two-year budget. Human Services Commissioner Kevin Goodno said those providers could probably weather the financial interruption without affecting service to more than 600,000 patients on state health plans.

“We’re going to monitor the situation and see how it turns out,’’ Goodno said Friday, adding that the state could change its strategy if a shutdown drags out and problems crop up.

Health plans could dip into their reserves to cover medical bills for patients on state programs, said Eileen Smith, a spokeswoman for the Minnesota Council of Health Plans. But in the labyrinthine world of subsidized health care, not all patients are enrolled in those health plans, and not all hospitals have the cash flow to smooth over the financial bumps.

At Cook Hospital, the delay would come at the busiest time of year, when vacationers in the region surrounding Lake Vermilion end up in the emergency room for everything from boating accidents to embedded fish hooks. Some come from remote areas including Crane Lake.

Chief Executive Officer Al Vogt said the hospital would probably borrow money and pare back on supplies so it could pay its employees. The facility takes in about $50,000 a month for patients covered by subsidized health insurance.

“It would put a hurt on us,’’ Vogt said. “There are so many small hospitals like ourselves that are on the cusp.’’

No workers would be laid off, and no patients would be turned away, he added.

Under the shutdown scenario outlined by Gov. Tim Pawlenty’s administration, payments to nursing homes, pharmacies, personal care attendants and private-duty nurses would continue. That means Cook Hospital’s 41-bed nursing home wouldn’t face the same financial pressures as the hospital operation.

Health insurance coverage would go on for those on state health plans. People could also apply for Medical Assistance and General Assistance Medical Care at county offices, but it would be harder to get MinnesotaCare because that state office would be closed. About 25 of the state’s 87 counties process MinnesotaCare applications.

Monthly premiums for MinnesotaCare would still be due.

Goodno said about $270 million in regular monthly payments for health and human services would go out, while another $242 million would stop during a shutdown. His department would be ready to make adjustments if a shutdown spiraled into weeks instead of days.

“It would be nice to have this thing resolved by June 30,’’ he said.