SDSMA president: No progress on reducing Medicaid cut

Talk about it

No progress has been made toward reducing a proposed 10 percent cut in state Medicaid funding, according to the president of the 1,900-member South Dakota State Medical Association.

Thomas Huber visited Mitchell to speak with area SDSMA members Monday evening at Chef Louie’s. The Daily Republic interviewed him prior to the meeting.

“I think we should prepare ourselves for a 10 percent cut and possibly more,” said Huber, a Pierre family physician. “Because if there’s going to be less than 10 percent in some places, there’s going to have to be more than 10 percent in others.”

Gov. Dennis Daugaard proposed a 10 percent cut in state funding to Medicaid — along with a host of other cuts — in his January budget address to the Legislature. He said the cuts are necessary to close a $127 million structural deficit in the state budget. He defined a “structural” deficit as one in which ongoing expenses exceed ongoing revenues.

Legislators must finalize the state budget and send it to the governor this month. There has been much debate about the proposed 10 percent cuts to Medicaid and K-12 education, with various proposals being floated to reduce the cuts or lessen their impact.

Huber suspects doctors’ reputations as among the wealthiest members of society is probably working against them. He acknowledged that doctors are not likely to receive any pity over potential Medicaid funding cuts.

“Nor do we deserve it,” Huber said.

Still, he wants people to know that “a business is a business,” and a cut in Medicaid funding will impact physicians. The SDSMA has said a 10 percent cut in state Medicaid funding would translate to a $30 million reduction in payments to health-care providers in fiscal year 2012.

Medicaid is a state-federal health program for people with low incomes and resources. Prior to the national economic recession and the state’s current budget problems, physicians already were saying their Medicaid reimbursements were not enough to cover the costs of provided services.

Huber said the problem will get worse if the 10 percent cut is adopted. Some physicians already are turning away new Medicaid patients, he said, and more could begin doing so if the cut goes through, though Huber thinks “most of the physicians will just bite it and go, and see what happens.”

“If you have a small practice, a private practice,” Huber said, “you have to approach it from a standpoint of how much business can I do where I lose money, and still figure out how to make it up in the end.”

The decision to accept or turn away new Medicaid patients is a tough one for physicians, Huber said, because they’ve taken an oath to care for people.

“They don’t want to have to say ‘no’ to take care of patients,” he said, “because that’s what we do.”

When physicians turn away Medicaid patients, those patients have to seek care elsewhere. Oftentimes, Huber said, those other options include Indian Health Service clinics, federally funded clinics or some other kind of “free clinic.”

As a last resort, he said, patients may visit an emergency room, where the cost for treatment will be much higher and will “chew up” the Medicaid budget more quickly.

Whatever happens in the short term, Huber is hopeful that the SDSMA’s Medicaid task force can work with government officials to make Medicaid more efficient in the long run. He proposes, for example, that diseases prominent in Medicaid patients be studied to determine how the care for those diseases can be delivered in a less costly fashion.

Such an approach could cut costs, he said, by reducing hospitalizations and overutilization of the health-care system.

“I think we’re going to have to take a look at the Medicaid population and approach it with some different ways of managing these patients,” Huber said. “We’re going to have to manage them more vigorously to get a handle on costs.”

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