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Ohio hospitals brace for new state fee

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The Associated Press Updated 12:01 PM Friday, November 27, 2009

COLUMBUS, Ohio — Ohio hospitals, which have been cutting staff and medical services amid the recession, are bracing for a new state fee that begins Monday.

The new franchise fee is based on a percentage of operating expenses at each hospital. It is expected to raise $718 million to help balance the state budget.

Federal money will help offset most of the cost because hospitals will be partially reimbursed with higher Medicaid payments. But hospitals will have to find a way to cover the remaining $145 million.

A lot of sacrifices and hard choices had to be made during the state budget process in order to not raise taxes for individual Ohioans, said Allison Kolodziej, spokeswoman for Gov. Ted Strickland.

"Hospitals ... are struggling through the recession like all businesses," Kolodziej told The Columbus Dispatch in a story published Friday.

A survey released this week by the Ohio Hospital Association found that half the state's hospitals have laid off workers, one-third reduced or cut services and 12 percent have canceled or delayed construction projects.

The cuts are more evident in rural areas.

Pike Community Hospital in southern Ohio cut 15 positions, or 5 percent of it's staff, and gave remaining workers a 7.5 percent pay cut. And MedCentral Health System in Mansfield will end its valet service in December, eliminating 19 jobs, or 0.7 percent of the staff.

Elsewhere in the state, the University of Toledo Medical Center is cutting 50 clinical workers to save at least $1 million a year. And Miami Valley Hospital in Dayton has laid off 14 nursing, ancillary and support positions to cut expenses.

Hospitals can offset the new franchise fee by charging private insurance companies more for care in the future. But for now, hospital officials they say they are trying to live with the financial loss without cutting more jobs or services.

"We're going to see our net income drop slightly, and we'll cut back on some of our capital investments to offset the difference," said John Stone, chief financial officer at the Ohio State University Medical Center in Columbus.

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Information from: The Columbus Dispatch, http://www.dispatch.com

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November 27, 2009 04:55 PM EST

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