State Budget Crises and Health Reforms Have Public Hospitals Facing Future Restructurings
Contact: John Hartgen
STATE BUDGET CRISES AND HEALTH REFORMS HAVE PUBLIC HOSPITALS FACING FUTURE RESTRUCTURINGS, ACCORDING TO ABI JOURNAL ARTICLE
May 2, 2011, Alexandria, Va. — Public hospitals likely face a period of financial and organizational restructuring due to states cutting Medicaid funding to reconcile budget shortfalls and national funding health care reforms cutting services in the near future, according to an article in the May 2011 edition of the ABI Journal. In “State Budget Crises, National Health Reform: Tough Love for Public Hospitals, or Rough Road to Restructuring?,” author Eva Anderson of AlixPartners (New York) provides an overview of the present and future challenges of public hospitals. Anderson’s article warns that boards and management of public hospitals and other safety-net institutions are likely to see an accelerated financial crunch as governors and legislators tackle their states' fiscal year 2012 budgets, and as federal health reform eases toward implementation on Jan. 1, 2014.
“For states dealing with back-to-back years of explosive growth in Medicaid enrollment and escalating costs during the recession, the pending elimination in June 2011 of enhanced federal Medicaid matching funds from the American Recovery and Reinvestment Act (ARRA) is presenting a daunting fiscal challenge,” Anderson wrote. Many states are also cutting Medicaid distributions in order to close budget gaps, Anderson said, adding further stress to the fragile conditions of many safety-net and public hospitals.
Anderson does see the “Patient Protection and Affordable Care Act” (PPACA), signed into law by President Obama, as a potential bright spot for public hospitals, as 32 million uninsured Americans will be able to obtain insurance. However, she points out that the reforms also threaten the programs that helped sustain public hospitals in the past. “Perhaps one of the greatest challenges for public hospitals will be competition for segments of their long-standing patient population, which will have a broader range of care options resulting from having insurance coverage under the PPACA.” The reforms have also “been dulled by the realities of the current economic situation at both the state and federal level.”
To obtain a copy of “State Budget Crises, National Health Reform: Tough Love for Public Hospitals, or Rough Road to Restructuring?,” published in the May 2011 issue of the ABI Journal, please contact John Hartgen at 703-894-5935 or via email at [email protected].
ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes more than 13,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.