State cuts likely mean higher health care costs

The state has already proposed cutting $112.8 million from its Medicaid program — that comes as need for government assistance...

Part 2 of 3: This story is part of a three-month series by reporter Ryan Wynne. The series will explore the way state budget cuts are affecting our schools, health care and local infrastructure projects.

By Ryan Wynne

Kay is in her 50s and has schizophrenia, and when Desmond Skubi met her, she was not taking medication for her disorder. Pharmaceuticals can be expensive, but Washington state provides payment assistance for qualifying residents.

Kay qualified and Interfaith Community Health Center helped her get the medication she needed for her disorder.

Now she has a job and a home, but in a few months that could change, and not just for Kay, which is a name given to this patient to protect her identity. State-provided pharmaceutical benefits for all Washington adults is about to get the axe.

“They will start being unmedicated March 1,” said Skubi, who is the executive director of Interfaith.

The cut is part of a plan to plug the state’s current biennium budget shortfall of $400 million. So far, $112.8 million is slated to be cut from the Washington State Medicaid program in accordance with Gov. Chris Gregoire’s decision to make cuts across the board.

Skubi said the funding loss will actually be double that, though, because the state will lose matching federal dollars. That figure was also determined before an even grimmer state budget forecast was announced — the state is facing a projected $6 billion shortfall in the 2011-13 budget. It was also settled on before voters decided to repeal taxes that were supporting health care, and simultaneously voted to make it more difficult for lawmakers to raise taxes.

“Quite frankly, we can’t cut any deeper without ending significant programs. Extremely difficult choices must be made and given this sharp revenue decline, they must be made now,” Gregoire said in a press release.

In the past two years, the state’s health care system has seen more than $1 billion in cuts, Skubi said, and this time around the state will save $39.4 million by cutting pharmacy benefits.

Without her medication, Kay will likely lose the things her medication helped her attain, Skubi said, “and that breaks my heart.”

The chopping block

The state has already begun booting thousands of people off Basic Health, a state-funded insurance plan for low-income residents. And when Gregoire received the even stormier budget forecast, she made a tentative proposal to cut Basic Health altogether. As bad budget news becomes worse, cuts to health care will likely grow deeper.

“I don’t know if we can sustain the service we are providing in the face of need that has never been greater.” Desmond Skubi, Interfaith Community Health Center executive director

State-provided health care services that were initially planned for elimination or reduction as part of across-the-board cuts include disability coverage, adult dental services except in cases of emergency, maternity support services, adult hospice care, school-based medical services, and physical, occupational and speech therapies. One program, Apple Health for Kids, is being scaled back, which would end health care coverage for an estimated 27,000 children statewide.

Several programs offered through the Whatcom County Health Department are also at risk, including the First Steps Program. The program helps new mothers and infants who are low income, and funding reductions over the past couple of years have already decreased these services, according to Dr. Astrid Newell, community health manager for the department.

County behavioral health programs have also taken a big hit in recent years. Anne Deacon, human service manager for Whatcom County, said state funding for mental health services has been significantly slashed.

“All that will be left for our community are some basic emergency [mental health] services,” Deacon said.

Funding will likely be reserved for emergency detention, which occurs if people are a potential threat to themselves or others.

Chemical dependency services, the other branch of behavioral health, are even worse off than mental health care, said Richard Geiger, director of behavioral health services at PeaceHealth St. Joseph Medical Center.

“Chemical dependency [funding] has been shut down much more rapidly than mental health has,” Geiger said, which may be because it’s seen as less of an emergency service. “Chemical dependency is an illness. It’s a disease.”

Nonprofits feel increasing demand

Like demand for behavioral health care, demand for most types of health care remains strong.

The number of uninsured patients visiting Interfaith Community Health Center, which sees patients using a sliding-scale payment system, has increased by more than 60 percent since 2008, Skubi said. So far, the organization has continued to serve them, but that could change.

“I don’t know if we can sustain the service we are providing in the face of need that has never been greater,” Skubi said.

That nonprofit isn’t alone. Whatcom Alliance for Healthcare Access (WAHA), which connects community members to health care services, also has a large, low-income client base, and that base is growing, Executive Director Larry Thompson said.

“Our volumes have grown quite a lot in the last year. The more cuts there are, the more people end up here.” Larry Thompson, WAHA executive director

Visits to WAHA have nearly tripled since 2006, and its client base is growing even more rapidly today. In 2009, the number of clients grew 6.4 percent over the previous year; this year, WAHA is expecting a 27 percent increase in the number of clients, Thompson said. He attributes much of that growth to cuts in the state-funded Basic Health plan.

“Our volumes have grown quite a lot in the last year,” he said. “The more cuts there are, the more people end up here.”

Rising cost of care

What all this means is fewer people have access to care and the amount of debt absorbed by hospitals and charity care they provide are increasing. But hospitals don’t actually absorb debt — they pass it on.

Hospitals pass costs on to other customers, including those paying out of pocket and those who still have insurance plans, Thompson said. And those extra charges aren’t absorbed by insurance companies either; they are passed on to customers, resulting in higher premiums.

“Financially, there is a significant impact on the business community,” Thompson said.

It’s known as a cost shift, said Chris Phillips, regional community outreach director at PeaceHealth. Last year, the hospital provided $15 million in uncompensated charity care, Phillips said, but it still has to pay for doctors, nurses and facilities.

In addition to reducing costs, the hospital is left with three obvious options, then: find alternative sources of funding through philanthropic donors, which are hard to come by; charge other patients more; or refuse to serve those who can’t pay, which isn’t legally an option and goes against PeaceHealth’s mission to provide for the most vulnerable.

“Our commitment is to maintain access to health care for everyone who lives in the community because that’s why we are here,” Phillips said.

Another stress on PeaceHealth now that there are fewer insured residents is increasing dependency on the hospital’s emergency department.

The number of people visiting the emergency department is increasing because fewer people can afford preventive care. People are waiting until things get really bad before seeking care, said Judy Rathje, regional director of emergency and trauma services at the hospital.

Those with obvious problems requiring immediate attention, such as gunshot wounds, will get the medical attention they need, said WAHA’s Thompson. Those with chronic diseases, such as diabetes, on the other hand, won’t get care until their diseases become problems. At that point, the cost of treatment rises while the chance of successful treatment decreases.

The emergency department is the place people end up in if they have nowhere else to go, Rathje said. And because of state cuts there will be more people with nowhere else to go and it will take longer for everyone to be seen.

Not only that, PeaceHealth’s emergency department is already having a difficult time finding outpatient services, which makes it harder to ensure safe patient discharges, and that will especially hold true in the face of more cuts.

“Quite frankly, we can’t cut any deeper without ending significant programs. Extremely difficult choices must be made and given this sharp revenue decline, they must be made now.” Gov. Chris Gregoire

Patients who aren’t safely discharged can end up on the streets, in jails and, eventually, back in emergency departments.

“I believe it’s a huge public health issue and a statewide community issue,” Rathje said. “We are very concerned. We care deeply about the health of our community.”

Ripples in the community

Skubi, from Interfaith, said results of these cuts will be profound. He has never seen anything that could affect patients and the community as a whole as much as new cuts likely will, he said, and those effects will probably play out in the streets of communities.

But while all of Washington will feel the effects of state cuts, Whatcom County won’t be as hard hit. That’s because in January 2009, the county adopted a one-tenth of one percent sales tax increase to fund behavioral health care. That pumped nearly $3 million into mental health and chemical dependency treatment in the county in 2009.

One of the reasons the tax was approved, according to a document prepared by the Whatcom County Health Department in July 2008, was to reduce other public safety costs.

“Untreated, serious mental illness and chemical dependency disorders overwhelm our criminal justice system and other public services, including the hospital emergency department. Many adults and juveniles end up in our courts and jails due to these disorders, resulting in substantial spending that could otherwise be better targeted to the offenders who pose a greater public safety risk,” according to the Comprehensive Behavioral Health Plan.

Deacon, from the health department, said people with mental illnesses tend to have longer incarceration periods if they remain untreated, and are more likely to recommit. Not only that, it tends to take more time for law enforcement to deal with calls regarding people with mental illnesses.

The county’s behavioral health plan is helping lessen the blow from state cuts, said Deacon from the health department.

“Some counties don’t have those dollars and will suffer significantly,” she said.

Still, the safety nets that were put in place are being quickly unraveled, probably more so than during any other period, Deacon said.

One of those safety nets is state-funded behavioral health beds, 16 of which were recently eliminated in Skagit County. Some of those patients will likely end up at PeaceHealth, which added more behavioral health beds, even as funding for that type of care was reduced.

But Geiger is concerned that PeaceHealth may soon be overwhelmed by a growing number of patients and run out of beds, he said. His No. 1 concern, however, is that these cuts are not the last of their kind — and judging from the state’s financial situation, those concerns are justified.

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