Financial health of state’s hospitals on a roller coaster

Published 9:58 am Tuesday, March 28, 2017

By Charlie Mitchell

A healthier Mississippi with more medical services, specifically for the underserved, was a hallmark of Gov. Phil Bryant’s stump speech when he was running for office.

It continued as a theme in Bryant’s first State of the State address, now more than five years ago: “We must be mindful of the increasing demand for health care, realizing that collaboration of all health care providers is the only way to achieve success. We must heal together, research together and find better ways to serve our citizens together,” he said. Bryant painted a picture of a vibrant medical corridor in the state capital, rivaling those in Houston and Memphis, and talked about medical zones across the rest of the state with tax incentives to add doctors in rural areas.

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It hasn’t happened. Instead, hospitals large and small are sitting in a bowl of financial spaghetti created by the whims of lawmakers and regulators in Jackson and Washington.

Earlier this month, nearly 200 University of Mississippi Medical Center employees went to work and were sent back home — told their jobs had been eliminated. Dr. LouAnn Woodward, who administers the $1.7 billion mega-center, said another 85 vacant positions will not be filled and 439 members of the teaching faculty will take pay cuts.

What got in the way of the governor’s vision?

The blame is shared by him, by the Legislature, Congress, this president and the previous president for failing to figure out who would pay for what. Too, private insurance companies and the pharmaceutical industry have not been idle bystanders. The medical pie in America is really big — about $21 billion per year in Mississippi alone — and everybody wants bigger and bigger bites.

Driving the cuts at UMMC was a total $32.7 million revenue shortfall, $8.2 million of which came via cuts Bryant ordered for almost all state operations because the state’s income has not met projections. The rest (initially $35 million but reduced to $24.5 million) traces to the state Division of Medicaid suddenly reducing the reimbursements it will pay hospitals for providing care when no one else pays.

Woodward put on her game face. She reminded the media that UMMC, the state’s only Level One trauma center and the exclusive location for many highly advanced medical services, has had its financial ups and downs. She indicated administrators are determined to stay focused on care, but conceded that this may be the first time a major whack has been sustained so late in the budget year. The shortfall must be covered between now and June 30.

Other hospital administrators were not so chipper in their reaction to the Medicaid “reformulation.” The heads of some smaller, rural hospitals said they don’t know if they can stay open.

Of all providers in the health care web — clinics, doctors, nursing homes, drug stores and such — it is inpatient acute care hospitals that have the least control over their revenue. That doesn’t mean most haven’t been in on the ridiculous escalations in health care costs. There has been corporate profiteering. But think about their situation: Patient loads can be unpredictable, and while hospitals can negotiate fees with private insurance carriers, they have no direct power to set or control Medicare or Medicaid rates.

As stated, Medicaid payments are the root of the current dilemma and the irony is that Medicaid is a gimme for this state’s economy. It’s like federal road aid. The state puts in a dollop of dollars and the federal treasury adds a full scoop. No state receives a more advantageous match in this program for the poor and disabled than Mississippi.

But not only can the state not keep up with the costs of this program, there’s no sign the situation will improve.

The state’s health care industry looked upon Bryant with a jaundiced eye back when he stood solidly against an Obamacare incentive for states to expand Medicaid for working people who could not afford private policies. Bryant left billions on the table and lots of people who needed insurance without coverage. But Congress is diddling over whether to do exactly what Bryant feared. Some Trump reforms, if any are enacted, would shift even more of the cost of Medicaid to states than Obamacare contemplated.

What the people want from government is what Candidate Bryant insisted was possible, beneficial to all. Neat, clean, clear. What people have received is, well, oodles of financial noodles extending and overlapping in every direction — a complete and total mess. Makes one wonder: Is there a Level One trauma center for financial disasters?

Charlie Mitchell is a Mississippi journalist. Write to him at