/ Modified mar 10, 2011 11:56 a.m.

Episode 8: Medicaid Cuts Could Constrict State's Recovery

Health care for working poor, insurance rates, and the overall economy would all suffer if Arizona slashes or stops AHCCCS, experts say

Gov. Jan Brewer's proposal to cut up to 280,000 adult Arizonans from Medicaid health-insurance coverage under the state AHCCCS system may have wide-ranging effects on the state, two health experts say.

The proposed $541.5 million cut would make the state's fragile economic recovery one victim, says Dennis Dahlen, senior vice president and CFO of Banner Health, a Phoenix-based nonprofit that, with 13 Arizona hospitals under its leadership, is the state's biggest health-care system.

"We're drawing down almost $7 billion in federal match to support our economy through the health care sector," Dahlen says of the Medicaid match to the state. "That supports other industries -- construction, retail trade, education -- by the investment of a much smaller portion of state funding."

Alison Hughes, head of the Rural Health Office at the University of Arizona's College of Public Health, says the cuts will be particularly difficult for the state's rural areas. She says they will hurt not only health care but the economy, because health-care facilities in rural areas often provide higher-paying jobs than do other rural employers.

Dahlen and Hughes, in separate interviews for the Mar. 4 episode of Arizona Week, say they are most worried about the effects of the cuts on health care for low-income Arizonans.

"Eliminating that many people from the AHCCCS rolls significantly hinders their ability to find primary care," Dahlen says. "Because we are hospitals required to treat everybody -- our emergency rooms are open 24/7 -- we're pretty sure we'll see them anyway and probably in increasing numbers. It will mean a greater burden on our staff, a greater burden on our facilities, likely longer waiting times for the rest of our patients and probably a downward spiral in quality."

Emergency rooms will become the first provider in rural areas, too, Hughes says, adding that it will present a special problem because hospitals in rural Arizona already have difficulty attracting emergency-room physicians. Under the scenario of Medicaid cuts, they will need more such physicians and staff members.

Hughes says the state's Native American population of 280,000 will be especially hard-hit because many of them get their health care through Medicaid. In one area, eastern Arizona's Whiteriver, 70 percent of the Native American population receives health care through AHCCCS, Hughes says.

Brewer and Republican legislative leaders have said the state has one of the most generous Medicaid systems in the country, and it simply cannot afford it.

Dahlen says it is a generous system in terms of patient benefits, but it supports the economy. He notes, however, that it is "not very generous" when it comes to paying health-care providers, who are reimbursed for only 70 percent of their costs, without the ability to negotiate.

Reporter Michael Chihak explores this issue further in March 4th episode of Arizona Week. Click to watch now:

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