Louisiana voters have passed two constitutional amendments designed to secure funding for cash-strapped hospitals, but critics say diverting cash to hospitals will hurt other beneficiaries of the state's already strained finances.
In Louisiana, where uninsured patients make up 18% of the population and state budget cuts are frequent, voters have passed two constitutional amendments that provide a safety net of sorts to the state's often troubled hospitals.
In Tuesday's election, two Louisiana Constitutional Amendments were approved by voters, each with a 56% majority. Amendment 1 gives protections to the Louisiana Medical Assistance Trust Fund and sets a compensation rate for nursing homes and other health care providers. Amendment 2 allows hospitals to draw more funding from Medicaid and creates a hospital stabilization fund.
The necessity of establishing such funds is the result of frequent state cuts to Medicaid, says Paul Salles, CEO of the Louisiana Hospital Association. "The cuts that we had received totaled about 26% over a period of several years… Our interest is in protecting services hospitals provide services to those vulnerable [Medicaid and uninsured] patients."
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"Beginning in 2009, with the economic downturn, hospitals in Louisiana have been experiencing significant cuts with the Medicaid program and funds availability for Medicaid and uninsured patients. We proposed in the 2013 legislative session… setting up a system which many other states use, a provider assessment program," he says.
"The basis of those programs essentially allows hospitals, in partnership with the state, to pool their funding and utilize those funds under the appropriate criteria that's set up by CMS and the federal government to maintain or attract available federal funding for hospital services within the Medicaid and uninsured realm," Salles says.
The structures within Amendment 1 does not increase taxes or fees; Amendment 2 requires hospitals to pay for assessments, but many hospitals will theoretically receive reimbursements equal or greater to the fees they initially paid. Those reimbursement rates are regulated and protected from decreases by language within the amendment.
A common concern of critics, however, is whether or not hospital patients and their insurers will end up carrying the burden of the assessments, or if funds might somehow be misappropriated. Additionally, no clear plan for implementation of either amendment has been proposed.
Funding Flop
The amendments had supporters among voters in both major parties and Salles maintains there was very little organized opposition, but the ballot issues did have some vocal critics. Barry Erwin, president of Council for a Better Louisiana, finds both amendments to be problematic—and questions the ability of the already cash-strapped state to divert funds to healthcare without hurting other beneficiaries of the state's already strained funds.
"The issue [we had with the amendments] was about tying up more dollars in the state constitution," he explains. His organization's leadership has expressed concern over the amount of non-discretionary funds left in the state budget.
"That's a practical problem in our state—the only area left with a sizable amount of money to cut is higher education," Erwin argues. He concedes that healthcare is important and says his organization does not plan to fight or try to repeal either amendment, but adds that leaving the matter up to voters to decide is not a good governing strategy.
Erwin was not alone in his concerns—The Louisiana Budget Project and AARP Louisiana were also outspoken opponents of the amendments.
Still, he says he understands the motivation behind those, like Salles, who worked hard to create and pass the new laws. "The state speaker of the house challenged the healthcare industry to come up with a solution [to healthcare funding problems]. They worked on this jointly and came up with the amendments. It was a good faith effort, and I don't fault them at all for what they did."
Lena J. Weiner is an associate editor at HealthLeaders Media.