“We didn’t think we were going to get nicked by this,” said Tom Breitenbach, chief executive officer of Premier Health Partners, whose four hospitals expect to lose $18.9 million from July 2009 through June 2011.
Kettering Health Network, which already has made job cuts this year, mostly through attrition, anticipates losses of $13.7 million throughout its network over two years.
“It’s not a catastrophic number by any means, but it is very significant,” said Russ Wetherell, KHN’s chief financial officer.
Hospitals agreed not to lobby against the budget bill based on an understanding that they’d recoup all money from the franchise fee, Wetherell said.
“Medicaid pays far less than costs to start with,” Wetherell said. “To get an extra burden on top of already trying to find ways to make up that shortfall is, we believe, not appropriate.”
KHN doesn’t foresee layoffs at this time, he said. Both hospital networks are just starting to put together their 2010 budgets.
The Children’s Medical Center of Dayton couldn’t provide a firm estimate of its shortfall on Tuesday, Aug. 18, but David Miller, Dayton Children’s chief financial officer, expects the hospital will recoup 90 cents of every $1 assessed.
The state has thrust an unfair share of the burden from its budget woes on hospitals, Breitenbach said. “I believe we were the only industry singled out for a tax increase,” Breitenbach said. He said state government must be careful not to strain the sources of its revenue.
Keith Dailey, spokesman for Gov. Ted Strickland, said the franchise fee isn’t a tax increase. Other entities such as nursing homes also pay franchise fees, he said.
“This was an extraordinarily difficult budget,” Dailey said. “It included more than $2 billion in cuts to state agencies and to very worthy programs that provide services, many of which Ohioans have relied on in the past. This was a budget that required shared sacrifice from all sides and from all industries.”
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