Monday, January 26, 2009

Funding for Georgia health programs, trauma centers may be a smoking issue
by Bill Hendrick
Georgia Online News Service

Funding to pay for additional, critically needed trauma centers and to plug huge deficits in health spending programs for the poor might come down to whether legislators in Georgia – an old tobacco state – have the nerve to raise taxes on cigarettes.

Gov. Sonny Perdue has proposed that the Legislature pass a 1.6 percent tax on hospitals and health insurers to finance a statewide network of trauma centers and fill holes in budgets for Medicaid and PeachCare for Kids, programs for the poor and indigent.

But critics, and there are many, say such a levy would backfire.

Hospitals and insurance companies would have no choice but to pass the added costs onto consumers, who already are cash-strapped, said Kevin Bloye of the Georgia Hospital Association.

Instead, Bloye said, the General Assembly should raise taxes on cigarettes by $1 a pack to give the state the $85 million or so it needs to fund trauma centers and help pay for programs providing health insurance for the poor, which now faces a $208 million funding deficit.

"A tax on cigarettes would make sense," Bloye said. "Cigarettes make people sick. A tax on cigarettes could reduce the number of people going to hospitals and not being able to pay, which is a big problem for the hospitals."

Georgia has 152 acute-care hospitals. But just 15 of them have trauma centers, specialized facilities capable of dealing with severe injuries. Only four can handle the worst types of injuries, and one is cash-pinched Grady Memorial Hospital in Atlanta.

Experts say that at least 25 trauma centers are needed around the state, but in a time of deepening recession, such expansion is not going to happen, Bloye said.

I-75 south of Macon is widely known as the "highway of death" because of the dearth of top trauma centers between there and the Florida state line. And tens of thousands of students at the University of Georgia in Athens are more than an hour away from a trauma center and thus are in jeopardy.

"This is the third year of dealing with the trauma debate," Bloye said. "The last two years we got close, but nothing happened. Now it needs to. We have only four Level One [the highest level] trauma centers, one in Atlanta at Grady Memorial, one in Macon, one in Savannah and one in Augusta."

Bloye said the state is unlikely to get more Level One centers but "is interested in increasing the number of Level Two and Level Three trauma centers."

"There are huge gaps in trauma coverage south of Macon," Bloye said. "The Level Ones are equipped to handle very complex injuries. The others provide care, but it's not as sophisticated."

Perdue wants $60 million to be appropriated for trauma centers, but critics say that that amount would not be enough, even if the Legislature managed to find it.

According to the Georgia Statewide Trauma Action Team, the state's trauma death rate is dramatically higher than the national average, 63 per 100,000 versus 56 nationally. Trauma is the No. 1 cause of death of Americans ages 1 to 44, and, in Georgia, it kills 20 times more than in other states.

Only 10,000 of 40,000 major trauma cases in Georgia each year are treated in designated trauma centers, according to that organization, which is urging the Legislature to fund a long-term network of centers.

State Sen. Eric Johnson, a Savannah architect who until this session served as the state Senate's second-ranking official behind Lt. Gov. Casey Cagle, says Perdue's plan to tax hospitals and other providers faces an uphill road, if not a vertical one.

"In down economies like this, we're in trouble," said Johnson, an acknowledged expert on health care and a likely candidate for lieutenant governor in 2010. "Trauma is part of where the governor wants to spend the money from the levy. He wants to keep from cutting health care programs, plus fund trauma. It's going to be tough. I don't know if anything's going to be done until the last few days of the session in March."

Bloye said he is worried that the Legislature, desperate to plug spending gaps, will try to raise money "in counterproductive ways" such as taxing hospitals and health insurers.

"As the economy worsens, you see more and more people losing jobs and health insurance,'' he said. "It's a vicious cycle. It's really damaging for hospitals, which already are laying people off, reducing services and doing all kinds of belt-tightening that we haven't seen in many, many years.

"We've got a major crisis on our hands," Bloye said. "We're supporting an increase in the tobacco tax instead of taxing hospitals. Georgia is about 43rd in the country in taxing cigarettes. There's a feeling that 'What better way [is there] to fund Medicaid and help the hospitals than by taxing cigarettes?' "

He said the GHA (Georgia Hospital Association) also supports a proposal to impose a $10 per car surcharge on autos in the state to fund the trauma system.

"Everyone agrees with trauma we have got to do something," Bloye said. "One thing is certain, though. With the current economic situation, anything that looks like a new tax is going to have a difficult time passing. We're trying now to come up with some other solutions to fund Medicaid and PeachCare. It's just too early in the session to know where money will come from, but it's going to be a tough session. We've just got to keep fighting to fill the huge gaps in trauma care.

Dr. Gregory Simone, chief executive of the huge WellStar Health System, based in Marietta, said that a tax on hospitals would be hard for many to handle.

"Bottom line is, we're seeing an increase in no-pays," Simone said, referring to patients who seek care in the system's emergency rooms but who have no health insurance or are indigent. "So are all hospitals. It looks like we're going to be $12 million over budget in the first half of the year. We're seeing more people, and getting paid less. Everybody is taking a hit."

He said a tax on hospitals and insurers would not necessarily plug the Medicaid hole or help pay for trauma centers because the Legislature could spend any money raised by a levy in any way it sees fit.

The GHA said in a statement that it "appreciates" the Legislature's problems in dealing with a huge budget deficit of some $2 billion but a third of Georgia's hospitals already are operating in the red.

Besides pushing a tax on tobacco, the GHA is lobbying for a small property tax increase to finance trauma care, and Bloye said President Obama's proposals to stimulate the economy could bring $300 million to Georgia.

William Custer, director of Georgia State University's Center for Health Services Research, said the state lacks the money to cover Medicaid expenses of poor people but must find a way to come up with money, which is matched 2 to 1 by the federal government.

"The state runs Medicaid and PeachCare for Kids, and PeachCare gets a larger match," Custer said. "They're either going to have to cut people or increase revenue. But the governor's proposal to raise taxes on hospitals and insurers will be very hard to gain traction.

"The hospitals are arguing with some justification that you are taxing sick people to pay for sick people," he said. "People with private insurance will have higher premiums. Premiums also will go up for people who work for companies, which will have to raise what employees contribute."

Custer also said President Obama's proposals to stimulate the economy include provisions for higher payments to states for Medicare and programs for poor children.

"It's going to be a lot of chit chat under the Dome," he said. "They're going to be waiting to see if the feds will bail them out. And that's possible. If Obama's programs pass, Georgia will not have a hole in Medicaid and PeachCare."

But Custer noted that Perdue told the Legislature he is not counting on federal money to plug the state's Medicaid/PeachCare deficit or finance trauma centers.

"It's all very complicated right now," Custer said. "It's going to be a couple of months, if then, before we'll know if there'll be trauma centers or if the state will have enough for Medicaid and PeachCare. They're going to have their hands full for a while at the Capitol, that's for sure."

Bill Hendrick covered science, health, business, the Legislature and foreign policy during his 29.6 years at the Atlanta Journal-Constitution.   [full bio]

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