Some Had Advance Warning

The Board that oversees the Quality Community Charitable Trust that helps support medical care to the indigent and medical needy was apparently given advance notice of this latest reduction in government contributions. From $7 million yearly (since at least FY2012-13) the amount has been reduced to $5 million, a 29% cut. Although the state used to contribute substantially more than the city, the two units of government contribute (at least for now) at essentially the same level. No explanation or justification for the reduction of the QCCT appears anywhere in the Metro budget. In fact, the single mention of the QCCT at all is in its line-item entry.

What lies ahead?
The handwriting on the wall is clear for this once-innovative program that cast University Hospital as the poor-people’s hospital of Louisville and made it easier for other hospitals to contribute less than their fair share. A combination of multiple changes in the QCCT partners, a crack-down by Medicaid on the methods used to finance the fund, and a scathing audit of oversight and management practices led the way. An increasingly difficult budget situation in both Frankfort and Louisville, and the anticipation that the Affordable Care Act (ACA) would reduce the amount of indigent and medically-needy care necessary provided either the coup de gras or the excuse for state and local governments to back further away from their commitment.

As I have argued many times in the past, this is not necessarily an undesirable result.  As long as our community demands that the healthcare system care for all comers to its doorstep, there must follow a corresponding expectation of community support to help pay for such services. Our community is no healthier than its sickest member, and whether it is paid for from private insurance, government funding, charity, or some provider’s other pocket– the risk of the few must be spread over the resources of the many. I believe however, that we need a different system locally (if not nationally) to share the assumed obligation.

Some Specifics in the Mayor’s Recommended FY 2014-15 Budget.

All of the designated QCCT funds are slated to come from Louisville’s general fund as opposed to federal or state grants. The decrease from $7 million to $5 Million represents a 28.6% cut.  A 13.0% decrease in the entire General Fund budget for the Department of Public Health and Wellness is recommended– from $32.3 million to $26.8 million. Activities in support of population and personal health services, and communicable disease prevention take particularly large hits. [Let’s hope the ACA does work as planned!]

If state and federal grants, and agency income is included, the recommended Health & Wellness budget is reduced from 32.3 million to $26,8 million– a 17.0% reduction. Perhaps the expectation of a reduced need for care is playing a role in these reductions, but I suspect that stresses on an already tight budget and a need to increase spending for expanded public safety and security are also determinative factors.

Match Me, or Match Me Not!
In at least some previous years including the last one, federal revenue from the “Medicaid Match” was included as a line-item. There is apparently no expectation of such in the future. (I do not have older budgets in hand, but I do not recall ever seeing this under-the-radar item before.) Once a bonanza for state and local budgets, and sometimes used for non-health-related reasons, this innovative budget-amplifying mechanism of obtaining more federal money is going the way of the Dodo bird. Some in government even called it a scam. Better to deal with the matter of healthcare finance openly.

Is the QCCT already extinct?
Frankly, I am not aware that is is possible for University Hospital to accept even the $5 million legally. I have not seen a QCCT agreement that was signed by the current operators of the Hospital.  By reducing their promised funding, state and local governments are in default of the current agreement and it is not clear to me University Hospital is following the required labor regulations that have always been part of the contracts. In my opinion, before even a single dollar is distributed, the public deserves to see newly signed documents that make it clear what we are paying for and what obligations are owed in return. It is time for a complete do-over!

That is my opinion. What is yours? I will show you my suggestions for the future if you will show me yours!

Peter Hasselbacher, MD
President, KHPI
Emeritus Professor of Medicine, UofL
May 23, 2014