Cutting benefits to poor assailed - All will pay price, health officials say.
by Marsha Austin
Denver Post
May 4, 2003

Colorado's proposed cuts in medical benefits to its poorest and sickest residents will help the state avoid an immediate budgetary disaster, but businesses and consumers may ultimately pay the price, some health industry executives warn.

      "If we think we are going to save money by denying these families, we're kidding ourselves," said Don Hall, chief executive of Colorado Access, the state's largest Medicaid HMO. "The people of Colorado are going to pay way more in the long run."

      The statee is squeezing short-term savings from its fast-growing Medicaid program, which will save taxpayers millions upfront. But the move may lead to overcrowded emergency rooms, sklyrocketing health insurance premiums and hospitals that can't afford to buy new technology or expand, said Hall and other Colorado health care executives.

      The state is proposing $71 million in cuts, including prescription drug limits, reduced home nursing for disabled children and the elimination of prenatal care for some pregnant mothers. Hospital executives said they can't afford more patients who can't pay their bills.

      "Clearly, any time Medicaid coverage is reduced, it translates to more uninsured people and a greater burden on the safety net," said Dr. Patty Gabow, chief executive of Denver Health Medical Center.

      On top of the proposed cuts, the state's Medicaid Health Maintenance Organization program is disintegrating, easing the state's financial load but putting added pressure on hospitals. In less than a year, four of the state's five Medicaid HMOs have either exited the program entirely or pulled the plug on Front Range operations.

      The result: Colorado saves $20-0 a month for every HMO member who drops back to the state's traditional plan, but tens of thousands of low-income patients get dumped from preventive programs designed to keep them out of hospitals.

      Westminister resident Gary Bowman is an example. He made 42 visits to hospital emergency rooms the year before he joined Colorado Access.    Bowman, 45, obese, suffers from heart disease, high-blood presure and schizophrenia, and he takes a lot of pills. Without the right combination, he's in trouble.

      "I get anxious. I get scared. And I get mean," Bowman said.

      Three years ago, Access bought him a medicine chest with a lock and an alarm that spits out a pill every time he needs to take one. Since then, Bowman has been to the ER only three times.

      "I didn't realize there were people out there who could help me who would care about me and watch out for me," he said. "If the state terminated Colorado Access, I'd feel like the walls were closing in on me, like how I was before."

      The aftershocks, should such programs continue to disappear, could reach far beyond the 320,000 low-income and disabled state residents who rely on Medicaid to pay their bills, Denver-area hospital and health plan executives said.

      "These cuts are going to have a substantial impact on the cost of health care for Everyone," said Jay Picernao, chief financial officer of Centura Health, Colorado's largest hospital system. Consumers will pay higher private health insurance premiums. he said.

      "Any savings the state accululates is an indirect tax," he said.    And every time insurance rates go up, more people drop health insurance and join the ranks of the uninsured or Medicaid's rolls. Recent economic pressures have exacerbated the problem.

      "Just because patients don't have coverage doesn't mean they don't need care, " said Laura Wegschied, Centura Health spokeswoman. "They end up a train wreck in the emergency room, and they can't pay the bill, so we pass the carge to insurers -- it's a vicious cycle," she said.

      Colorado isn't alone. Almost every state in the nation has cut or plans to reduce Medicaid medical benefits, drug coverage or payments to doctors and hospitals this year, according th the National Conference of State Legislatures.

      But Colorado is the only state this year to abandon its HMO program, an option that Hall and others said is far cheaper for the state and much more beneficial for Medicaid patients.    Getting rid of the HMOs is just one more way for the state to save money by denying people care, said Jim Hertel, publisher of Colorado Managed Care Review. The fewer people in HMOs, the less the state pays out each month, he said.     When patients leave HMOs, they don't get preventive care, and they often have a hard time finding a doctor, all of which adds up to costly hospital visits, Hertel said.

      "In the next 6 - 12 months, we'll see significantly higher rates of emergency room usage and hospitalization of Medicaid members," he said.

      Others said, however, that Medicaid cuts are not as harmful or expensive as consumer groups and some health care providers claim.

      "I don't think people are going to die because of this," said Karen Reinertson, director of the agency that runs Colorado's Medicaid program. "There are worse (restrictions) than we've set up in every health plan in the nation."

      But even Reinertson agreed with her critics that what makes Colorado's cuts so painful is that they go deep into a Medicaid program that is far leaner than those of other states.   Because of budget constraints and political opposition to funding public entitlement programs, Colorado has always provided the minimum amount of services allowed by federal law. The state ranks 49th in the nation in health benefits offered to its poorest residents. Starting July 1st, when the state's 2004 fiscakl year begins, many health experts here predict that Colorado will fall to dead last.

      While other states cut perks such as dental and vision benefits, Colorado, a state that has never offered such services, is cutting home nursing for disabled kids and dropping legal immigrants -- many of them elderly -- from the program altogether.   Many of the cuts don't eliminate entire progams but do cap the amount of medical care, drugs or goods for Medicaid members. And that's caused the biggest public outcry, Reinertson said.

      While Colorado has never enacted the optional services, other states have. "We've never put limits on what do have," she said. "There's a sense (among patients) that 'what I want is what I need.' People are not thrilled about this."

      Hospitals are feeling the impact of Medicaid cuts that went into effect in April and last summer.     "Even though we don't yet know the total dollar impact on Denver Health, we do know that we are seeing more and more uninsured patients," Gabow said.

      Despite concern about the cuts, Colorado's Medicaid program will pay a lot of money to care for a lot of poor, elderly and disabled next year, Reinertson said. "We will have a program that's going to hit $2 billion," she said. "We have not destroyed the Medicaid program in Colorado."

Top - Back to Article Archive