Tag: House Bill 4706

House Budget Threatens Hospitals, Workforce and Patient Access

Member News

The budget passed by the Michigan House of Representatives on Aug. 26 includes harmful cuts to hospitals that could jeopardize more than 20,000 jobs, according to the MHA. Estimates released Sept. 3 indicate the cuts could also result in a $4.9 billion loss to Michigan’s economy if House Bill (HB) 4706 is signed into law.

The estimates consider the more than $2.5 billion in potential hospital funding cuts included in HB 4706. The impact on jobs would be particularly profound, as on average, 60% of a hospital’s budget is due to labor. Such a cut could have an additional estimated induced and indirect economic loss of $2.4 billion on the economy. More than one million jobs are directly, indirectly or induced by healthcare in the state.

The proposed House budget includes:

  • New language placing $2.5 billion of hospital provider-tax funded payments in contingency, requiring unnecessary administrative and legislative actions that could jeopardize timely hospital payments.
  • Elimination of at least $100 million of funding from the Specialty Network Access Fee, which provides reimbursement to support physicians caring for patients with Medicaid coverage.
  • Elimination of $10 million to support the Maternal Levels of Care verification for birthing hospitals.
  • No funding to support providers who have not been reimbursed by the Michigan Department of Corrections contractor Wellpath.

Furthermore, Michigan hospitals already stand to lose more than $6 billion over the next 10 years due to federal budget cuts. Further reducing funding that supports delivering healthcare services and the nurses, physicians and other staff employed by hospitals harms Michigan and its more than 10 million residents.

The MHA opposes any and all threats to hospital funding and continues to advocate for a real budget passed by Sept. 30 that supports healthcare and the hospital workforce who serve Michigan communities.

The MHA urges members to contact their lawmakers through an action alert to oppose these harmful cuts to hospital funding and access to care.

Members with additional questions should contact the MHA advocacy team.

House Budget Endangers 20,000 Hospital Jobs and $4.9 Billion Economic Loss

News Releases, Issues in Healthcare, Top Issues - Healthcare

An estimated 20,000 hospital jobs could be lost in Michigan and lead to a $4.9 billion loss to the state’s economy if the House version of the state budget ultimately is signed into law, according to new estimates from the Michigan Health & Hospital Association (MHA).

The estimates consider the more than $2.5 billion in potential hospital funding cuts included in House Bill 4706. The impact on jobs would be particularly profound, as on average, 60% of a hospital’s budget is due to labor. Such a cut could have an additional estimated induced and indirect economic loss of $2.4 billion on the economy. More than one million jobs are directly, indirectly or induced by healthcare in the state.

“Healthcare is the largest private-sector employer in the state, with hospitals employing the most direct jobs within the sector with approximately 222,000 employees,” said MHA CEO Brian Peters. “Our calculations show the House version of the state budget could ultimately lead to a 9% reduction in the direct hospital workforce. Hospitals are one of the largest employers in each of their communities, meaning job losses to this magnitude would be felt in every corner of Michigan.”

Provisions of the budget bill that would lead to losses include:

  • New language that places $2.5 billion of hospital provider-tax funded payments in contingency line, requiring unnecessary administrative and legislative actions that could jeopardize timely hospital payments.
  • Elimination of at least $100 million of funding from the Specialty Network Access Fee (SNAF), which provides reimbursement to physicians caring for patients with Medicaid coverage.
  • Elimination of $10 million to support the Maternal Levels of Care verification and MI-AIM safety program for birthing hospitals.

Hospitals depend on stable funding, predictable reimbursements and policies that reflect the real costs of care. This is necessary from all healthcare payors, including the state. Eroding established funding levels and risking both the certainty and the timeliness of payments prevents hospitals from making needed investments in the hospital workforce, patient care and capital improvements.