Possible Medicaid Cut May Reduce Health Services

Health officials said the 6 percent cut would take $20 million in state funding away from the Medicaid program and $11 million from hospital outpatient funding.

But the cuts would have an even greater effect because the federal government matches every $1 of state funding with an extra $2, effectively translating a $20 million cut to $60 million.

Gov. Mike Easley and state legislators are scrutinizing the 2002-03 budget for possible cuts because fiscal analysts predict that the state could be facing a $1.2 billion shortfall due to a bleak economic forecast.

Easley has asked all state agencies to submit proposals for budget cuts, with some agencies submitting scenarios for cuts of up to 11 percent.

Lanier Cansler, deputy secretary of the N.C. Department of Health and Human Services, said parts of Medicaid are federally mandated and exempt from budget cuts.

Cansler said optional services such as optometry, dental care, podiatry, chiropractic care, elderly care and pharmacies might see cuts in funding.

Cansler said the agency would rather not have to cut health services.

"We do not like a thing on this list," he said. "We are better off not making the changes."

He said making long-term cuts, like eliminating certain programs, would be be better for the medical community and patients than the short-term cuts being discussed.

Services for adults, especially the elderly and the physically and mentally disabled, would be targeted in the discussed Medicaid cuts.

Don Dalton, spokesman for the N.C. Hospital Association, said the cuts would hurt a large number of N.C. hospitals.

Dalton said two-thirds of N.C. hospitals are operating in or near the red and rely on Medicaid patients for a portion of their budget.

Most of the hospitals experiencing budget problems that might force them to close are located in one of the state's 65 rural counties.

Dalton said closing smaller hospitals also will hurt the larger hospitals.

"It is like a quilt," he said. "When the smaller pieces are taken away, the larger pieces are strained."

He said the association's mission is to provide emergency and stabilization care to those who qualify.

He added that every Medicaid-covered patient who is lost will cost hospitals money.

Dalton said he is concerned about communities that might lose their hospitals.

"It is part of the community infrastructure," he said. "When hospitals close, medical care leaves and the industry shuts down in the community."

He said that without a hospital, many new businesses likely would not move to the area.

Dalton said the cuts to Medicaid are unreasonable, partly because the state has been cutting the program for the last decade. "We are very efficient with our resources."

The State & National Editor can be reached at stntdesk@unc.edu.