Hospitals a “Must-Have” in Pennsylvania State Budget

Updated on March 31, 2011

By Carolyn F. Scanlan
President & Chief Executive Officer
The Hospital & Healthsystem Association of Pennsylvania (HAP)

“This budget sorts the must-haves from the nice-to-haves.” With those words, Governor Tom Corbett established the priority framework of his first budget as the state’s chief executive.

Unfortunately for Pennsylvania’s 12 million citizens, the reality is markedly different: the Governor’s budget proposes to cut hospital Medicaid payments by more than $150 million in state funds, the effects of which will be compounded by the loss of an additional $183 million in federal matching funds, resulting in $333 million in payment reductions.

These cuts will jeopardize access to hospital care for expectant moms, automobile accident victims, and burn victims. The young, the elderly, persons with disabilities-the people least able to work-will potentially face the loss of critical hospital services in urban, suburban, and rural communities across the state.

“We need to do the hard cutting so the tree can once again bear fruit. And that fruit is jobs.” Again, this budget goal does not consider one of Pennsylvania’s key job creators: hospitals. While the Governor’s budget address emphasized jobs and job creation, the proposed budget endangers jobs in every community, as hospitals are among the state’s leading and most stable providers of jobs in every region of the commonwealth. Overall, hospitals are responsible for nearly 600,000 health care-related jobs and $99 billion in economic impact to the state.

Pennsylvania’s hospitals are mindful of the budget realities facing Pennsylvania. In fact, in the current fiscal year through 2013, the state’s hospital community contributed approximately $246 million in revenue to the state’s general fund to help with the budget challenge, while negotiating a new Medicaid payment system that is not reliant on any new state funding. Hospitals are doing their part to help in these difficult times and to assure that patients have access to quality care.

But in a proposed budget that has been widely characterized as business-friendly, hospitals’ roles as job creators and economic engines of their communities are threatened.

Hospital care is a must-have, not a nice-to have, for all Pennsylvanians, and it must be available to all Pennsylvanians. We urge the Governor and legislature to restore hospital Medicaid funds in the final budget.

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