Monday, April 4, 2016

Chancellor prepares UAMS for potential of Obamacare loss

Posted By on Mon, Apr 4, 2016 at 5:25 PM

click to enlarge DAN RAHN: A memo from him explains difficult news. - BRIAN CHILSON
  • Brian Chilson
  • DAN RAHN: A memo from him explains difficult news.
We wrote on a couple of occasions last week about UAMS Chancellor Dan Rahn's comments to the University of Arkansas Board of Trustees about the difficulties the campus would face if Gov. Asa Hutchinson is unable to get the legislature to approve continuation of the Obamacare-financed expansion of Medicaid.

That expansion has added paying customers to UAMS services and trimmed uncompensated costs. More than a quarter-million Arkansas were added to those insured. But legislature failure to continue the program could require a state budget reduction of more than $100 million.

Rahn said a looming budget deficit at UAMS could grow to almost $100 million without that income. The next day, the UA Board asked Rahn for a specific report on fallout should the money be lost.

Rahn has passed that message along to UAMS staff (some 11,000 in all). Here it is, with some emphasis added:

Hello. I have some news to share with you, not necessarily good news, but I feel that I need to share this with you. I have been charged by the Board of Trustees of the University of Arkansas System to develop scenarios for what we would have to do if Governor Hutchinson’s innovative proposal for Medicaid Expansion (Arkansas Works) is not approved by the Arkansas General Assembly.

Our cost for the care of individuals in the Medicaid expansion population who were cared for through our integrated clinical enterprise last year was $65 million. Payments for their care were similar to this amount. If these individuals were to become uninsured, there would be little revenue from their personal financial resources to pay for their care.

We already have a challenging financial operating environment as many of you know so we would not be able to absorb $65 million of cost without revenue to cover the cost of care provided. Our institutional response would have to be multifactorial and far reaching: not scheduling elective visits and procedures for uninsured individuals, modification and shrinkage of clinical, research and academic programs to reduce costs dramatically, modification of infrastructure support, etc. This would affect every component of UAMS’ operation both here on the main campus and throughout the state of Arkansas. Academic programs, class sizes, residency programs, regional campuses and other operating units would all be affected.

It is entirely appropriate for our board to ask the question of just what we would need to do but the answer is very complex because of the way the components of our mission are intertwined. I sincerely hope that our elected officials will work through the process, come to consensus and approve Arkansas Works. Thousands of newly insured individuals are benefiting from the opportunity to have access to needed health care.

UAMS is dependent on the patient care revenue we receive for the care that we provide to cross subsidize our academic and research programs and our institutional infrastructure. Our entire model hinges on all of the component parts working together. I do not want you to be unduly alarmed but I always want to keep you informed about issues that affect our institutional mission so I thought it important to share this with you. I ask that this not distract you from the incredibly important work you do every day and I thank you for your dedication to the mission of UAMS.

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