The state's budget proposals will result in less care for Medicaid patients and bad news for Oregon's struggling economy, hospital officials say.

The state's budget proposals will result in less care for Medicaid patients and bad news for Oregon's struggling economy, hospital officials say.

Significant budget reductions to the Oregon Health Authority and the Oregon Health Plan patient population mean the weight of the cuts will "land on the backs of the poor and disabled on Medicaid," said Kevin Earls, senior vice president of the Oregon Association of Hospitals and Health Systems.

"This will have terrible impacts on access to care," he said.

Earls said the "needs-based" budgeting methodology used by Gov. John Kitzhaber and the Oregon Legislature listed the Oregon Health Authority as having a "need" for $2.5 billion in general fund resources.

But only $1.8 billion in general fund money was initially allotted in the proposed budget toward that need. That would have left a $698 million deficit and a 19 percent cut in reimbursements for health care providers, he said.

On Wednesday, leaders of the Legislature's human services budget subcommittee softened the blow a bit. But that still means Medicaid providers are facing an 11.5 percent cut in the coming year.

Kent Brown, chief executive officer of Rogue Valley Medical Center, said the original budget proposal would have meant $37 million in cuts to RVMC alone, which he said would undoubtedly have an impact on the hospital's staffing levels and services.

The cuts will have a double-whammy on the state, Earls said, because federal Medicaid reimbursements are tied to state levels of funding. Also, federal health care reform is expected to provide health insurance for 158,000 additional Oregonians, with the federal government initially picking up all the cost. However, the cost will be based on the level of payments covered by the state at the beginning of 2014, so if the state reduces its reimbursement, the federal payments will shrink proportionally.

The cuts likely will make it increasingly difficult for Medicaid patients to see a private practice doctor, because physicians say the reimbursements from the program do not cover their costs. That has combined with low reimbursements for Medicare patients to create a sizable pool of Oregonians who do not have ready access to health care.

"What worries me most . . . is patients who are no longer being treated in this valley," Brown said.

Both Medicaid and Medicare are entitlement programs, which guarantees the recipients hospital access, Earls said. However, all other care is voluntary and can be denied, often forcing Medicare and Medicaid patients to turn to emergency rooms for non-emergency care.

A large percentage of doctors in Josephine and Jackson counties no longer accept Medicare and Medicaid patients because of the low state and federal reimbursements, Brown said.

As access to primary care physicians plummets, emergency rooms become the only guaranteed point of access to medical care, Earls said.

"The care that's needed for these people is not going to change," said Earls. "And they will only get sicker if there is no access to a primary care physician."

Brian Herwig, chief operating officer for Providence Medford Medical Center, said Providence's mission of providing care for the poor and vulnerable through its hospital and clinics makes them a magnet for Medicaid and Medicare patients.

"Our ER volume is up," Herwig said.

When patients feel forced to use the ER as their primary care facility for continual or episodic care, the medical costs soar for the state and for the hospital, said Mike Bond, chief operating officer of PrimeCare, an association of Southern Oregon physicians in private practice.

"It is three or four times more expensive," he said.

Bond agreed the proposed 11.5 percent budget cut to the state's Medicaid program "falls on the backs of the poor."

The shortfall will be made up in one of three ways, Bond said.

"Either they will cut benefits, drop people from the Medicaid rolls, or cut reimbursement to the care provider," Bond said.

Providence currently operates in five states, said Herwig.

"Of those five states, Jackson and Josephine counties have the highest unemployment and the lowest reimbursement rates," Herwig said.

Reach reporter Sanne Specht at 541-776-4497 or e-mail sspecht@mailtribune.com.