On either side of Tampa Bay, two historic institutions long counted on to train physicians, care for the poor and heal children are facing funding cuts in the Florida Senate of more than $25 million. If the Senate prevails in budget negotiations with the House, these cuts will slash a gaping hole in the safety net that All Children’s Hospital and Tampa General Hospital provide to the area’s most vulnerable citizens.
This potential negative impact to our health systems is a result of the Legislature’s proposed Diagnostic Related Group (DRG) proposal. Last year, the state passed legislation to research and implement a DRG system, which would mean a move from a traditional reimbursement model that pays for each day a patient is in the hospital to a model that reimburses on the basis of the severity of the patient’s condition. Although a DRG system appropriately places the burden on the health system to manage care efficiently, this approach is limited in its capacity to properly reimburse hospitals for complex pediatric disorders which defy easy categorization into DRGs. The proposed Senate plan does not address the fact that teaching, children’s and public hospitals face higher costs than other hospitals.
The negative repercussions will be felt far beyond the Medicaid patient population, which includes working families throughout the Tampa Bay area. It also will potentially damage two valuable assets that the bay-area community has helped to build through years of philanthropic support.
All Children’s Hospital employs nearly 3,000 local residents. It also creates an economic ripple effect in the community that has resulted in the creation of an estimated 1,100 additional jobs at other local businesses and vendors.
Nearly 70 percent of kids treated at All Children’s are covered by Medicaid — the highest percentage of any Florida hospital. Current Medicaid reimbursement rates don’t cover the full cost of providing care to children with complex medical problems, which are most often the types of kids that All Children’s sees.
Yet the Senate’s proposal could further reduce All Children’s funding by nearly $19 million — seriously impacting our ability to maintain and advance our commitment to teaching future physicians and researching childhood illness. Such staggering reductions could affect care provided to children today, the training of physicians needed at the bedside in years to come and the potential development of new treatments for your children’s children.
Tampa General Hospital also cares for a substantial Medicaid population while training some 300 medical residents annually as well. It’s the area’s only Level 1 trauma center and one of just four burn centers in Florida. With more than 6,000 employees, the hospital is one of the largest employers in the region and also supports myriad local businesses.
Tampa General also plays a significant safety net role to residents throughout the Tampa Bay area, yet the Senate proposes reducing its Medicaid reimbursements by another $6 million this year, while for-profit hospitals statewide could see their Medicaid reimbursements increased by nearly $96 million in total.
If the Senate’s position is adopted, vital public funding that is lost to our two nonprofit, community-based institutions will instead be redistributed to for-profit, investor-owned hospital chains. This reallocation, which could occur within 90 days, does not save taxpayers any money — it simply takes funding from our community’s teaching and children’s hospitals and gives it to for-profit hospitals.
We are committed to providing safe, high-quality, cost-effective care to our patients, their families and the citizens of this region and state. We are committed to working with our legislators to ensure equity in the proposed new reimbursement system. But we believe the development of a reimbursement system must not come at the expense of quality care for our most vulnerable citizens, neither now nor in the future. We urge state legislators to adopt the Florida House’s more reasonable proposal.