August 29, 2008
MCG Layoffs a Potential Side Effect
By Tom Corwin
Cuts in Medicaid payments could trigger layoffs at Medical College of Georgia Hospital and Clinics as the state tries to fill a budget hole.
The board of the Georgia Department of Community Health meets today, and the Medicaid budget is on the agenda.
Gov. Sonny Perdue has asked state agencies to prepare plans for cuts of 6 percent, 8 percent and 10 percent to meet a budget shortfall of at least $1.6 billion and perhaps as much as $2.2 billion, said Don Snell, the CEO of MCG Health Inc., which runs the school's health system.
Officials of MCG Health had hoped Medicaid would look at cutting back on benefits, but now it might be a 5 percent payment cut to providers. For MCG Health, that would mean nearly $14 million less in payments and supplemental payments, Chief Financial Officer Dennis Roemer said.
And that would mean fewer personnel, Mr. Snell said.
"If we have to reduce those kinds of dollars, it's going to be pretty draconian," he said. "It would be a large personnel reduction. I would try to keep it away from direct patient care areas, because if they affect the payment rates, we would still see the patients."
The obvious targets would be in administration and support services, Mr. Snell said.
The health system and the school are hoping to avoid a reduction in the direct appropriation to the health system that would result in a cut in support for the school's residency training programs. At 6 percent, that would be $2.1 million. MCG President Daniel W. Rahn said that would be on top of a 6 percent cut of about $9.5 million and would actually be a bigger hit for MCG than others in the University System of Georgia are experiencing.
"The assumption of an additional $2 million reduction at a minimum would be extremely problematic on the campus side," Dr. Rahn said.
The school and health system had been at odds over funding for residency training earlier this year. The two sides compromised, with the Board of Regents kicking in an additional $2 million to help settle the matter. Having gone through that process, and with the School of Medicine expanding to a branch campus in Athens and satellite campuses in Savannah and Albany, Mr. Snell said he hopes the regents will forgo that part of the cut.
"With the state's priority of training more physicians and a priority on the medical education initiative, that there ought to be a cut, it doesn't make sense," he said.
Reach Tom Corwin at (706) 823-3213 or [email protected]
Originally published by Tom Corwin Staff Writer.
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