A Healthy Blog

Massachusetts health care — wonky, with a healthy dose of reality

Difficult Cuts

Difficult Cuts

October 16, 2008

Yesterday Governor Patrick released his budget cuts, required under state law due to declining revenues. Detailed information is available on the state web site, here. The cuts -- which add up to more than $1 billion -- could not be done without hitting health care programs. Health care is about a third of the state budget, and health care programs took their share of the cuts. Some important priorities were spared, however, and we commend the Governor, Secretary Kirwan and Secretary Bigby for keeping the solid commitment to the success of health reform.

The largest health care cuts came in the core Medicaid line items. Together, they come to around $152 million in programs for adults and children, and $73 million in programs for seniors. These cuts are around 3% of the projected spending for these accounts. Our understanding is that no cuts are planned to MassHealth eligibility and benefits. The savings will come from trims in providers rates and other savings initiatives. The Massachusetts Hospital Association statement said the cuts will create ‘‘extreme hardship for many hospitals and the communities they serve.’’

We are concerned about the impact these cuts will have on providers, and access to health services for those enrolled in the programs. Medicaid cuts are particularly inefficient, because cuts also result in the loss of federal reimbursements. The state needs to cut two dollars in services in order to save one dollar in state funds. The loss of federal revenue hurts our overall economy.

The MassHealth programs for the most vulnerable - Basic, Essential, Healthy Start, CMSP and the HIV program - were not cut.

The administration took a creative approach to protecting the community outreach grants, critical towards maintaining health coverage and promoting continuity of care (see our earlier analysis). The program is held harmless, using funds from HEFA (the Health and Educational Facilities Authority) and the Connector to replace cut state funds. We are deeply grateful to these independent entities for their role in providing funding for this priority, and to the Governor for his ongoing support of this vital work.

Other cuts trimmed important HCFA priorities. The Oral Health Advocacy Task Force expressed concerns about cuts to the DPH Office of Oral Health, the BEST preschool screening pilot project, and dental programs in Taunton and the Cape. Among the many DPH cuts were reductions in tobacco control, infection prevention, and HIV prevention and treatment programs (including elimination of the disparities program). The Children's Mental Health Campaign was disturbed about the impact of a $2.25 million cut in the $76 million Child and Adolescent Mental Health Services line item.

The Office of Health Equity, an important initiative spearheaded by the Disparities Action Network, retained its funding.

Investments in health care savings also were cut. The new academic detailing program, which has the promise of producing significant savings by promoting cost-effective prescribing, lost $200,000 of its $500,000 budget. Funding was eliminated for the Primary Care Workforce Development and Loan Forgiveness program (UPDATE: The primary care program was not cut). The Health Care Quality and Cost Council will absorb a $706,000 cut in its $1.9 million budget. We think health cost and quality improvements are the only long-term fix to spiraling health costs, which is a long-term factor underlying the structural budget issues. We hope these efforts are not shortchanged in an effort to find penny-wise, pound-foolish cuts.

MassHealth, DPH, and other agencies will be having meetings in the coming days to further explain their cuts to stakeholders and other interested parties. EOHHS used an open process to gather information from the public before these cuts were decided on, and we're pleased that the two-way communication will continue.

The national economic pain is translating into serious hardships at the state level. For the Governor and Secretaries Bigby and Kirwan, this has surely been an anguished exercise. Balancing the competing interests is never easy, and we hope the administration can relook at these cuts as the year progresses.
Brian Rosman