- Associated Press - Tuesday, May 19, 2015

MIAMI (AP) - Gov. Rick Scott’s new hospital commission consists of Republican donors and business leaders who will likely help him go after some of the state’s hospitals as the standoff over Medicaid expansion intensifies.

The panel, which will meet for the first time Wednesday, is beginning its work as the governor has become increasingly antagonistic toward hospitals that receive taxpayer funds in the face of a $1 billion hole in his budget.

Scott wants the federal government to extend the hospital funds, known as the low-income pool, which helps hospitals that care for Medicaid and uninsured patients. But the Obama administration and the hospitals want the Republican governor to expand Medicaid to more than 800,000 low-income Floridians, arguing it’s more efficient to use the money to give people insurance than to pay hospitals for caring for the uninsured retroactively.

The standoff between Scott and the Obama administration has also caused a mess in the state Legislature. Scott and Republican House leaders remain adamantly opposed to taking any money tied to so-called “Obamacare,” including Medicaid expansion. The federal government would foot the bill for the first few years and then pay 90 percent after that - a far more generous deal than the 60-40 split in the current Medicaid program.

Scott says Medicaid expansion would cost the state $5 billion over 10 years. But even if the Obama administration agrees to extend the hospitals funds, it would still cost the state $9 billion in matching funds over 10 years, yet not a single person would have gained health insurance.

The governor is suing the Obama administration over Medicaid expansion, but with the federal government showing no signs of backing down, Scott has turned his attention to hospitals, creating a panel to examine their finances which does not include any health care executives.

The staunchly conservative governor, a former CEO of a for-profit hospital chain, wants the hospitals to share profits with each other and has asked his panel to examine hospital profits, including salaries, bonuses and lobbying expenses.

It’s unclear how much impact the panel will have as the Legislature reconvenes for a special session June 1 and must approve a new budget by June 30 to avoid a state government shutdown. The head of the commission is a real estate developer and heavy donor to Scott’s political campaign and the Republican Party. It’s also the second time Scott has convened a hospital panel since taking office - the first commission didn’t accomplish much.

“I think (Scott’s) looking for the report to say that we somehow or other need more medical care. He’s an advocate of competition and de-regulation,” said Linda Quick, president of the South Florida Hospital and Healthcare Association.

While consumer choice might work in food and other industries, excessive competition in health care raises prices and jeopardizes the quality of care because the infrastructure is so costly. If you don’t have a sufficient volume of patients, then the unit price goes up. You don’t want a trauma team that’s idle five days a week, said Quick, who testified before Scott’s first panel.

“Part of what (the governor) was looking to see last time was whether these tax supported institutions were somehow mismanaged, inefficient, or abusing their public government ownership status … but (the first commission) couldn’t find anything.”

Critics have accused the governor of punishing hospitals who have spoken out on the issue. He sent a letter last week asking UF Health Jacksonville why it was more reliant on the low-income pool funds than other hospitals and encouraged them to consider partnering with more profitable medical centers in the area.

CEO Russ Armistead, whose hospitals stand to lose $95 million, warned the Legislature he’d have to close in a few months without Medicaid expansion and the loss of low-income pool funds.

Democratic U.S. Congresswoman Corrine Brown told Scott that the hospital, which is in her district, would not close under her watch.

“The letter is an attempt to distract from the fact that he has not only failed to provide critical healthcare to millions of Floridians, but opposes members of his own party in the Senate who have developed a common sense plan to address the needs of these vulnerable citizens.”

Hospital officials say they need the hospital funds and expanded Medicaid to survive and urged the governor to adopt a Senate plan that would eventually privatize Medicaid just like the state’s current program for 3 million Medicaid recipients.

“You have suggested that a new tax on hospital operating surpluses might be a way to sustain the existing LIP program. Such an arrangement is not a solution to the challenge we face,” according to a statement from the Florida Hospital association signed by nearly two dozen hospital heads.

“As more Floridians are covered, this approach allows our state to reduce its dependence over time, on a supplemental funding pool.”

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