Health care groups say jobs budget could lead to layoffs

PROVIDENCE, R.I. (AP) - Hospital and nursing home advocates said Friday they’re worried Gov. Gina Raimondo’s “jobs budget” could lead to layoffs in their industry.

The presidents of the Hospital Association of Rhode Island and the Rhode Island Health Care Association said Raimondo’s proposal to cut Medicaid reimbursement rates would likely lead to layoffs at area facilities if the cuts are included in the final budget.

“No question about that, it would result in the loss of jobs,” said Virginia Burke, of the Health Care Association, the state’s association of skilled nursing facilities.

Most of the facilities’ funding pays for staff, according to Burke and Michael Souza, of the hospital association.

Raimondo unveiled an $8.63 billion budget Thursday that seeks to eliminate a $190 million deficit while implementing no new broad-based tax changes.

She proposes closing the deficit largely through spending cuts. Health and Human Services faces a nearly $94 million cut.

Many people are praising the proposal for its increased education spending, business tax credits and job-creating initiatives.

“From an executive branch point of view, it’s the most imaginative, sophisticated thinking we’ve seen in 30 years when it comes to business development,” Laurie White, president of the Greater Providence Chamber of Commerce, said Friday.

Rep. Joseph Shekarchi, chairman of the House Labor Committee, said he has tried for three years to get support for a tax credit for businesses that create jobs. With the governor’s backing, Shekarchi said he’s confident it’ll pass this session.

And Evan Smith, head of the regional visitors’ bureau Discover Newport, said he was excited to see the governor allocate $4.5 million for a statewide tourism campaign. The budget proposes redistributing lodging tax dollars that fund regional tourism bureaus. Smith said he would oppose that plan though, if it means his organization would get less money.

“I’ve been here for 25 years and I really haven’t seen any governor come forward and put tourism on the same platform as other major economic development engines in the state,” Smith said.

But Souza, Burke and others in health care said they hope their industry doesn’t have to take such a big hit as the governor works to close the deficit and pay for new initiatives.

Eliminating the scheduled fiscal 2016 hospital payment rate increase and imposing a 5 percent cut would save $15.7 million and eliminating the rate increase for nursing homes and imposing a 3 percent cut would save $8.9 million, according to Raimondo’s budget. Additional funding for these groups could be cut through other budget proposals to address growing health care costs.

Souza said the federal government matches the funds, so hospitals would lose double the amount that’s cut. The hospital association supports finding a long-term solution to reform the Medicaid system, rather than cutting payments annually, he added.

“We want to see where we could avoid those cuts, and have more of a focus on changing the way we provide health care,” he said.

Raimondo has charged a 29-member group with “reinventing Medicaid” by cutting costs and improving services. She projects $46 million in savings will be realized through its work.

Burke said she’s hopeful Raimondo’s initiatives to reinvigorate the economy will work, so there won’t be a need for such drastic budget cuts.

“If her economic plans and her education plans result in more and better jobs, that will help. We’ll be better equipped to face the challenge of caring for the vulnerable and frail people of this state,” she said.