Hospital restructuring points to financial difficulty in Pueblo - KOAA.com | Continuous News | Colorado Springs and Pueblo

Hospital restructuring points to financial difficulty in Pueblo

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Lay-off notices given out to 300 workers at St. Mary-Corwin Medical Center in Pueblo. (KOAA) Lay-off notices given out to 300 workers at St. Mary-Corwin Medical Center in Pueblo. (KOAA)

Layoffs announced this week as part of the restructuring at St. Mary Corwin Hospital in Pueblo point to a difficult financial reality facing many Colorado healthcare providers; there isn't enough money coming in to pay for the care being provided.

According to a January 2017 report from the Colorado Department of Health Care Financing and Policy, Medicaid reimburses healthcare providers at a rate of roughly $0.75 for every dollar of care provided. Conversely, private insurance pays roughly $1.58 for every $1 of care provided. In Pueblo County, nearly half the population, around 79,000 people, are either enrolled in Medicaid or have no health insurance. 

Gianna Lisac, Marketing and Communications Coordinator at St. Mary Corwin said health systems big and small are struggling to respond to rising costs, major reimbursement cuts, and other disruptive changes.

"We are at a crossroads and making a choice to adapt to the changing landscape," Lisac said.

The hospital announced Thursday that it plans to downsize, laying off roughly 300 employees, reducing the number of intensive care unit beds.  The hospital will also transform itself into more of a specialty hospital focusing on its cancer and orthopedic care units.

"Medicare and Medicaid don't reimburse as well as private insurances and that drives how care is delivered," said professor Joe Franta, Associate Dean of the School of Nursing at Colorado State University-Pueblo. "Areas where you have large Medicare or Medicaid populations obviously have a little bit more impact on the providers."

Franta said the low reimbursement rates have led many smaller family practices and primary care providers to stop accepting the federal health benefit altogether. That shift has sent Medicaid patients to emergency rooms and urgent care facilities for what would otherwise be normal doctors visits.

Colorado lawmakers created a hospital provider fee in 2010 as part of the Medicaid expansion enacted as a result of the passage of the Affordable Care Act, also known as Obamacare. That fee is charged to healthcare providers against their patient revenue and the money collected is then matched by federal funds and redistributed to providers who serve high numbers of Medicare and Medicaid patients. 

Rising fee revenues combined with an improving economy meant that state coffers were fast approaching growth limits enacted under the Taxpayers Bill of Rights last year and would have triggered a refund to the citizens as a whole. Lawmakers passed a bill that reclassified the hospital provider fee as a state enterprise, thereby exempting it from TABOR growth limits.

However, the bill also called for a $200 million cut in fees in order to keep the budget under the TABOR growth limit. Since the hospital provider fee is matched dollar-for-dollar with federal funds, that meant a loss of $400 million for those providers who care for large numbers of Medicare and Medicaid patients.

Lisac said St. Mary Corwin will continue to serve all populations, including the uninsured and low-income populations, through their Southern Colorado Family Medicine Residency Program.

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