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SW FL Healthcare Systems Cope with Financial Unknowns

Rudolf Vlcek via Flickr Creative Commons

The stalemate between the Florida House and Senate over whether to expand Medicaid led to the 2015 legislative session ending with no budget in place.  It also means it’s unlikely that Florida hospitals will see an extension of the federal Low Income Pool (LIP) program which provides funds for hospitals treating uninsured low-income patients.  That creates challenges for healthcare systems in Southwest Florida and around the state.

The Florida House adjourned early this week without a budget in place, because of an impasse over a Senate plan to expand Medicaid to some 800,000 Floridians.  Billions in federal dollars is also at stake as the Obama Administration has signaled that without an approved Medicaid expansion plan, an extension of LIP is unlikely. 

That funding is set to expire June 30.  Lee Memorial Health System receives about $48 million each year in LIP funding and Naples Community Hospital Healthcare System receives about $7 million.  These political unknowns create budgeting challenges according to NCH President and CEO Dr. Allen Weiss, but local healthcare systems are in a better financial position to shoulder the losses than other hospital systems with high indigent patient loads. 

“At the Florida Hospital Association we’ve spoken about what to do about the other hospitals that are in very precarious financial positions,” said Dr. Weiss.  “Fortunately, for Southwest Florida, Lee Memorial’s very healthy.  We’re very healthy as a system, but we still need to be cognizant of what’s going on in the state and figure out how best to help everyone.”

Last week, the state’s chief economist Amy Baker told Senators at a special Medicaid workshop that the loss of LIP funding over the next five years would mean the loss of an estimated 20 thousand jobs in Florida and could cause about 50,000 people to move out of the state. 

Lee Memorial Health System President and CEO Jim Nathan emphasized that Florida’s healthcare industry is being closely monitored.

“We just got our updated bond ratings from Standard and Poor’s and Moody’s just this week and they’re watching us very carefully,” said Nathan.  “They gave us a stable rating on where we are today, but they also held it in aviance wondering what’s going to happen with this funding.  We have physicians who are asking the question as we try to recruit them to come to this community, ‘Will the revenue stream be there?’”

Nathan says despite looming funding questions, Lee Memorial continues to grow and expand.  “The big issue here is Florida is the second highest uninsured state in the nation and Southwest Florida, where we live, is the second highest region in the state for the uninsured after Miami-Dade,” said Nathan. 

Nathan hopes the Legislature takes up Medicaid expansion in the upcoming special session.  “There’s a whole business case around wanting to get these individuals covered besides the fact that it’s the right thing to do for them.  It is also harming the economics of our state.”