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Not funding Medicaid is bad for business according St. Vincent’s CEO

By Bill Britt
Alabama Political Reporter

MONTGOMERY—In the last year St. Vincent’s Health System opened a new $32 million, 40-bed facility in St. Clair County.

St. Vincent’s Chief Executive Officer, John O’Neil is concerned what will happen to the new facility and all hospitals around the state, if September’s constitutional amendment to fund Medicaid should fail.

O’Neil is also concerned about how the failure of the CA could affect the state’s fragile recovery.

“We have some major momentum going in the state with Airbus and all the governor is doing, we certainly don’t want to slow down this recovery,” O’Neil said.

He also believes not funding Medicaid, prisons and other programs would send a bad signal to the global business community.

“This is not a message we want to broadcast around the world, that Alabama’s broke,” said O’Neil. “We are not broke, we have a problem that can be fixed. We have a short-term solution which is the constitutional amendment and we need to use it.”

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O’Neil admits that the borrowing the fund from the gas and oil trust may have not been the best choice “ but it gives us an opportunity to fund Medicaid while working toward better solution for the future.”

He says that underfunding the program by $200 million dollars which would cause “a major crisis within the state.”

“This would mean having to immediately go to proration, gut the Medicaid program, which would result in cutting and closing necessary services,” says O’Neil.

St. Vincent’s Health System has five facilities in Alabama: St. Vincent’s Birmingham, St. Vincent’s Blount, St. Vincent’s East, St. Vincent’s St. Clair, and St. Vincent’s One Nineteen Health and Wellness.

O’Neil, says that with further cuts to Medicaid the state will have more primary care physician who will no long see Medicaid patients “because they can’t see them for nothing.”

“This mean hospitals will be treating more Medicaid and uninsured patients in the ER and that means that the expense of caring for those individuals is shifted onto those with healthcare coverage,” O’Neil said. “So there will be a significant rise the whole cost of healthcare.”

He says this is the type of things that hurt business because when their healthcare premium of up that means they have less to invest to grow. “This results in few jobs being created, which has a major impact on the economy through out the entire state,” O’Neil said. “This is certainly not the time for something like this when Alabama is trying to recover from an unemployment crisis.”

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The newest St. Vincent’s located in Pell City, according to O’Neil, treats a higher degree of Medicaid patients than facilities in large urban areas.

“Not funding Medicaid will be devastating to rural and small hospitals which have a much higher reliance on Medicaid dollars,” said O’Neil. “If the Medicaid program is severely damaged and the problem grows, then we would have to make some difficult decisions like laying off staff or reducing services.”

He like other hospital administrators understands that “Medicaid doesn’t pay great but at least it pays something.”

He also acknowledges, “What Alabama offers as Medicaid, is not what would be considered a rich Medicaid program by any stretch of the imagination. It is a very barebones program compared to most states. But it is an important service to take care of the poor and vulnerable.”

O’Neil points to the fact that in the last year there have been four rural hospitals closed in Alabama.

According to the most recent surveys most hospital in Alabama are breaking even or operating at a small loss.

“In Alabama we have some of the lowest reimbursement on the commercial as well as the Medicaid side but we also have the most efficiently run hospitals in the country,” said O’Neil.

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He also says, “We don’t have the ability to cut fat, there isn’t any.”

O’Neil takes a cautionary tone saying, “We have done everything we can do to reduce cost, we have worked to take less reimbursement but if more cuts are coming, something will have to give. Mark my word if this amendment doesn’t pass we will see hospitals closing.”

O’Neil does see practical policies such as move toward a more coordinated care, “We need to have the infrastructure to put navigators into the system to help Medicaid patients get the right care at the right time in the right place.”

He says that while he is against tax increases he believes that lawmakers should consider a user fee on tobacco products.

“We have an opportunity to keep things going while we work on a long-term solution we would be foolish not to take it,” said O’Neil. “We can’t afforded to slam the door on our economy at this very crucial time.”

Written By

Bill Britt is editor-in-chief at the Alabama Political Reporter and host of The Voice of Alabama Politics. You can email him at [email protected] or follow him on Twitter.

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