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Looking for solutions to loss of hospital payments

Minnesota's hospitals, health care providers, and a group of legislators recently started meeting to come up with ways to deal with a loss of $400 million to General Assistance Medical Care.

Most of the funding for the program goes to local hospitals. Gov. Tim Pawlenty vetoed funding for GAMC during the last legislative session, Sen. Dan Skogen, DFL-Hewitt, said.

GAMC provides health care for over 30,000 adults, the majority of whom face mental illness and chemical-dependency issues. Many hospitals and health care experts worry that eliminating health care coverage for these individuals could have a detrimental effect on other areas, such as an increase in suicide, homelessness, unemployment, crime, and the use of expensive emergency room care.

"In years past, many of the people who now rely on GAMC would have been committed to state hospitals," Skogen said. "The costs were substantial, and the courts determined that many of those commitments were unjustified. The people that would have been hospitalized in the past are now living in communities in every corner of the state. GAMC is needed to make sure they have access to the health care and medications they need so they do not become a danger to themselves or to others."

The GAMC cut was scheduled to become effective on July 1, 2010, but an additional unallotment by the governor will cut another $15 million by moving the effective date up to March of next year.

At a meeting held last week, the Minnesota Hospital Association commented that the overall loss of funding will be devastating to hospitals and local communities. They said that hospitals must start the budgeting process now and can't wait to see if a funding solution will emerge.

"Everyone agrees that public health care costs need to be trimmed, but we need to be smart about it. We should concentrate on cutting what is wasteful or unnecessary, and not just shift state government costs to businesses and families with private health insurance," said Skogen.

"We also must keep medical providers in greater Minnesota," Skogen said. "Here's an example. At last week's meeting, Regions Hospital in St. Paul, home of the well-known Burn Center, which handles the most severe burn cases from the state, said that they are already consulting with bankruptcy experts. Even though we don't live in St. Paul, it's good to know that a world-class facility is in the state. The same is true for rural hospitals and medical providers. Folks in the Twin Cities may not live here, but they visit or pass through here. Medical emergencies happen--and when they do, it's important that medical care is close at hand."

The GAMC work group is slated to meet again in early September, with the aim of getting a plan developed by the end of the year. Because of the state's budget situation, however, financial challenges will continue to cause difficulties for hospitals and health care providers.

"I hope we can find a way to solve this problem on a bipartisan basis," Skogen said. "Not only will vulnerable people lose their coverage, but our hospitals and medical providers will be under even greater stress to provide the services all of us depend on."