Hospital Association Reinforces Concerns about Cost-shifting from BadgerCare Cuts

Friday, May 25, 2012 at 9:11 PM by

Original BadgerCare Proposals Would Have Raised Uncompensated Care Costs by At Least $100 Million

In testimony before the Assembly Health Committee on Wednesday, a representative of the Wisconsin Hospital Association (WHA) said the original BadgerCare changes proposed by the Walker Administration would have increased uncompensated care for hospitals by at least $100 million.

Fortunately, the original proposal was not approved by federal officials, and the number of people who are expected to lose their BadgerCare coverage as a result of the upcoming changes has dropped from nearly 65,000 to about 17,000. (See our May 3 summary of the original DHS proposal and the approved changes.)  Nevertheless, the state’s scaled back cost-cutting plan will shift significant costs onto other health care consumers.

The testimony Wednesday was by Eric Borgerding, who is the WHA executive vice president. Borgerding said: “If someone comes into our emergency rooms we will take care of them, no matter if they can pay. We costed out the impact, and it would have been in the order of $100 million or more of uncompensated care which we would have then had to shift to other payers.” (Source: May 24th Wisconsin Health News)

The WHA testimony reinforces the point we have been making for much of the last year – that the proposed changes to BadgerCare wouldn’t make the health care system more efficient and less expensive. Instead, they would shift costs from the state onto consumers – as the increased cost of hospitals’ uncompensated care gets passed along. And by decreasing the focus on preventive care, as well as forfeiting the 60% federal match the state gets when it maintains BadgerCare, the total costs borne by Wisconsinites would actually increase.

One source of frustration for us throughout the debate about BadgerCare cost-cutting has been the lack of transparency about the effects of the proposed cuts. The WHA testimony Wednesday is the first estimate I have seen of how hospitals and their consumers would have been affected by the original set of cost-cutting proposals. The cuts were developed without any explicit legislative authorization, any public hearing within the legislature, or any agency rulemaking. As a result, DHS was never required to write a fiscal note or engage in some of the other practices that would have given interested parties the ability to learn more about the full range of effects and to engage in a more thorough and informed public debate about the proposals.

As more information about the effects of the BadgerCare changes comes to light, we think it is becoming even clearer why policymakers should rethink the changes to BadgerCare, especially now that the state Medicaid deficit is far smaller and the state expects to finish the biennium well in the black. (See the May 4th WI Budget Project paper. )

It’s also becoming clearer that the state should undo the sweeping shift in Medicaid and BadgerCare policy-making authority and restore the procedures that provide much more opportunity for the facts to be vetted. In addition to improving transparency, returning lawmaking authority to legislators would once again make elected officials accountable for critically important policy decisions that affect tens of thousands of Wisconsinites. 

Jon Peacock

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