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  • Sen. Gary Lambert
  • Sen. Jim Luther
Sunday, August 7, 2011

Hospitals shouldn’t be immune to state budget cuts

Guest Commentary

Hospitals play a unique role in our lives, both emotionally and economically.

Their presence runs deep with families and individuals, who hold strong ties to them through the joy of a birth, the relief of emergency care or the grief of losing a loved one. In addition, they are often a town’s largest employer.

Nashua is fortunate to have two outstanding not-for-profit hospitals in Southern New Hampshire Medical Center and St. Joseph Hospital, both of which have a distinguished history of more than 100 years of care in the Gate City.

But hospitals are also businesses. And that’s true whether they are for-profit or not-for-profit.

During tough economic times, like we are currently experiencing, all businesses must make adjustments, especially those who look to state government for a portion of their funding. When state government is forced to cut back, realizing it must live within its means, dependent businesses like hospitals must do some belt-tightening as well.

The $4.4 billion budget the Legislature passed in June for 2012-13 does indeed include cuts. And we spread those cuts across state government. Every department received less money than in 2010-11, except for the Department of Corrections.

We began the budget process at a severe disadvantage, with Republicans inheriting a $800 million deficit. To balance the budget, we had to make tough choices, many of which we were not happy about, but they were necessary following four years of runaway spending by Gov. John Lynch and the Democratic-controlled Legislature. Our fiscal decisions were not an attempt to hurt hospitals; they were tough choices required to balance the budget and protect taxpayers.

Unfortunately, the Senate was unable to fill a $115 million shortfall in funding to reimburse hospitals for the services they provide to the poor called “uncompensated care.” However, we made certain in the new state budget that the commissioner of health and human services is required to give hospitals more money for this purpose should revenues come in higher than projected during the budget process.

Our commitment and the commitment of the state Senate is that the first revenue that the state receives above the budget will be directed to the hospitals. We stand by this commitment.

In response to funding cuts, several hospitals – including SNHMC and St. Joseph – have filed suit against the state, requesting an injunction regarding the decrease in their uncompensated care payments. In the process, it is our opinion that they are blurring the line between two very different issues: uncompensated care and Medicaid provider payments.

While the hospitals are publicly criticizing $200 million in uncompensated care reductions in the current budget that they claim are forcing them to make their own cuts, they are actually suing over cuts made to Medicaid provider payments starting in 2008, reductions that were made by, again, Lynch and the Democratic-controlled Legislature.

The services and reductions the hospitals are now making in response to reduced funding from the state are dramatic and definitely headline-grabbing. The medical center has begun the process of laying off as many as 100 workers and shutting down a 30-bed behavioral health unit, while St. Joseph announced it is closing Rockingham Ambulance and preparing for layoffs.

Our question is this, and it may be the same one many readers have as well: Were layoffs and shutting down Rockingham Ambulance really the hospital’s first options?

This is an important question to ask, particularly given the fact that last year New Hampshire hospitals had revenues above expenses totaling $200 million, while hospital executives’ paychecks added up to $60 million.

Clearly, the hospitals’ approach is putting a real scare into local residents and their own employees. But St. Joseph and the communities of southern New Hampshire will not be without ambulance service. Rockingham is just one provider, and the hospital is in the process of securing a contract with a new company. And instead of reacting so quickly with layoffs, this is an opportunity for all hospitals across New Hampshire to find real cost savings.

As state senators and residents of Greater Nashua, we place a high value on the city’s two hospitals. As this story continues to unfold with many moving parts, the bottom line remains the same: A huge part of this problem is a result of runaway government spending, and runaway spending has consequences.

We are seeing them play out down in Washington, and we are experiencing them right here in New Hampshire.

Likewise, neither state government nor hospitals can ever be guaranteed a safe harbor, untouched by the pain, anxiety and sacrifice a long-term recession brings.

Sen. Gary Lambert, R-Nashua, and Sen. Jim Luther, R-Hollis, are members of the New Hampshire Senate. Lambert’s wife, Lori, is a member of the St. Joseph Hospital board of directors; Luther’s wife, Melinda, is a professor of nursing at Nashua Community College.