VALDOSTA -- Citing increasingly grim budgets and the specter of reduced services, 14 area hospitals -- including South Georgia Medical Center -- called on state lawmakers to rethink $278 million in proposed Medicare funding cuts on Wednesday.

"Georgia's hospitals are the medical safety net for Georgia's needy. We recognize the governor and the legislature are facing tough challenges, but you can't expect to slash millions in hospital funding and still provide the same level of services," said Ken Beverly, CEO of Thomasville's Archbold Medical Center, at an Albany press conference.

For SGMC, the proposed cuts would mean a loss of $1.7 million in state reimbursements for Medicaid patients, said Greg Hembree, the hospital's chief financial officer. Last year, 21 percent of SGMC's admissions were Medicaid recipients.

Hembree said shifting more of the Medicaid funding burden to the local level could place hospitals that are already streamlining budgets to choose between technology reinvestment and services that -- while popular in the community -- don't generate revenue.

"We're seeing our margin every year, almost every month, shrink. ... We are cutting back every way we can," he said. "We are trying to reduce supply costs and be more productive. But at some point you can't tighten anymore, and you have to start looking at services. We are trying to absorb (cuts), but it is getting to the point that we won't have adequate funds for reinvestment in technology into the hospital and services. There is only so much we can absorb without making some of the tougher decisions."

Hembree declined to say what services might be on the chopping block should the situation fail to improve, but cited SGMC's home health service, which was discontinued, as a past example of service reduction in the face of a looming bottom line.

Hospital administrators warned the cuts could also affect physician access for many low income citizens who rely on Medicaid. Faced with declining reimbursements, physicians may choose to stop accepting new Medicaid patients. A Medical Association of Georgia survey estimated nearly half of state physicians would stop seeing new Medicaid patients should the cuts take effect.

Because hospitals cannot turn away Medicaid patients, other community-wide services would likely be targeted to make up the difference. If approved, the cuts would take effect July 1. The SGMC fiscal year begins Oct. 1, and Hembree said the hospital would likely try to limp to October before reassessing service and technology funding levels.

About 20 percent of all Georgia residents receive Medicaid, but that number balloons to 33 percent in South Georgia.

The 14 hospitals represented at Wednesday's press conference serve 37 counties that are among the poorest in the nation. Those demographics exacerbate medical problems and the cost of health care.

"It has a high African-American population," said Doug Bachtel, a University of Georgia demographer, said of the area.

"It has persistent, intergenerational poverty," he said in a phone interview from Athens. "It has high infant mortality. From a health care perspective, with no diversified economy, a lack of jobs and low educational levels, prevention efforts fall on deaf ears. When people go to the doctor, their problems are acute because they've waited. They need something immediate, like an operation, because they don't have healthy lifestyles."

Hospitals also cite the loss of federal matching funds as a reason to abandon cuts. For every dollar spent by the state on Medicaid, the federal government provides $1.50 in matching funds. Administrators questioned cuts to a program that returns money to the state.

Rather than Medicaid cuts, administrators proposed a series of alternative health care funding strategies. Increasing the state's excise tax in cigarettes was one alternative as was prescription drug reform. Medication is the single largest Medicaid expense.

Other alternatives include temporarily diverting money from OneGeorgia tobacco settlement funds





to health care programs as well as expediting disbursement of federal anti-terrorism funds designated to help hospitals cope with future terrorist attacks.



To contact reporter Bill Roberts, please call 244-3400, ext. 245.



Information from the Associated Press was included in this report.

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