Penny-Wise, Billion-Foolish

Pawlenty's plan to slash health and human services only looks good on paper

This is especially true with respect to prenatal care. By the state's own estimates, nearly 3,000 of the people who would lose their insurance under Pawlenty's budget would be pregnant. "The governor wants us to back out of prenatal care for undocumented persons. That happened in California and they did a reputable follow-up study two years later that showed over three dollars worth of cost for every dollar saved," says Linda Berglin, chair of the Senate's Health, Human Services and Corrections Budget Division, who adds that babies born to undocumented persons are considered U.S. citizens, to whom the state is required to provide care. Lisa Edstrom, executive director of the Neighborhood Health Care Network, points out that those who are undocumented and pregnant tend to be "teens who by virtue of their age represent higher-risk pregnancies. At our West Side Community Clinic alone, 80 percent of our prenatal caseload will be affected."

According to the Minnesota Hospital Association, Pawlenty's budget cuts will also deprive the state's 140 nonprofit hospitals of $220 million over the next two years. "Eliminating general assistance medical care for the most vulnerable and poorest of Minnesotans concerns us because it is not only our moral but our legal obligation to care for them," says Lawrence Massa, CEO of Rice Memorial Hospital in Willmar. Fifty percent of the state's general assistance services are provided by three "safety net" hospitals in the metro area--Regions, Hennepin County Medical Center, and Fairview-University Medical Center. With that in mind, Tom Crowley of St. Elizabeth's Hospital in Wabasha stresses that rural hospitals will also be affected by cuts and the governor's proposal to charge higher premiums for MinnesotaCare, which will be borne by self-employed farmers and workers in small-town businesses that can't afford to offer health insurance.

Last year, 31 nonprofit hospitals operated in the red and another 40 had operating margins of less than one percent, which is not sufficient to upgrade medical technology or educate staff. Massa, who says that there will be cost shifting to private payers, still predicts that some hospitals will have to close down needed services or shut their doors altogether. His own facility is faced with eliminating its hospice program, diabetes education, and kidney dialysis; there will also be pressure to downsize an already overworked staff, and the mental health clinic, another service that frequently doesn't pay for itself, may be eliminated.

The eventual cost of Pawlenty's "savings" will be staggering
The eventual cost of Pawlenty's "savings" will be staggering

That's not the only way Pawlenty's budget could disrupt the lives of poor people with mental health problems. The governor's proposal to require those who use any of the state's health care plans (general assistance, medical assistance, or MinnesotaCare) to make a co-payment ranging from $1-$6 on prescription drugs and doctor visits may not seem like much, but when you read that he expects it to save the state an estimated $32 million over the next two years, you realize how often some people, especially those with mental illness, interact with the health care system. "About 60 percent of the people on general assistance have a severe mental illness. They need regular psychotropic medications, need to see a psychiatrist or therapist, need chemical dependency treatment," says Glenn Anderson, executive director of the Human Development Center in Duluth. "But their general assistance is $230 a month. A $3 co-pay for them is like an $87 co-pay for me--and many get multiple drugs and services. So they have a choice between meds and rent. They are going to stop taking their meds and as a result their life is going to go down the drain. The next time we see them will be when they go into the ER or get dropped off at the jail or scooped up out of a snow bank. Then the cost of taking care of them is going to be ten times or a hundred times as much."

The impact of Pawlenty's budget cuts is often exacerbated by the accompanying loss of matching dollars from the federal government and private sources. Ron Brand, executive director of the Minnesota Association of Mental Health Programs, says that "mental health has essential funding from the state to keep programs going. If that gets cut, or it becomes discretionary funding, then it is hard to also earn the private health care funding payments, or philanthropic money, and things diminish."

"Almost all the programs I am dealing with have federal matching dollars, which we lose we when cut funding," says Ann Henry, of the Minnesota Disability Law Center. In a twist on the Bush-Pawlenty argument--that tax cuts will circulate more money into the economy--Henry wonders about the loss of dollars that, instead of being invested, will almost certainly be spent. "Almost all the funding for the elderly and disabled services goes to moderately paid workers. Because their salaries are usually very low, they have to spend nearly every penny they earn on Main Street, Minnesota; for fuel, housing, food."

One of the more clear-cut examples of state funding stimulating local economies would be nursing homes, which, according to testimony at the capitol, are frequently one of the largest employers in rural towns. Pawlenty's denial of cost-of-living increases and Medicare co-payments for nursing homes, and his request for an across-the-board, four-percent reduction in either the state's total payment rate or the facility's complement of beds, puts the screws to this already tenuous industry. It will compel nursing homes to either lay off staff, boot patients, or add cost to private payers. This in turn will force Minnesotans to either alter or discontinue their own employment to personally care for their parents and grandparents, or dig deeper to provide them with continued care. They may not be tax dollars, but money will be effectively taken out of taxpayer's pockets.

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