For hospitals and the communities they serve, the impact of the plan to outsource Medicaid is not just about utilization reductions.
While services that are medically necessary will still be provided, there will be payment delays and denials from the managed-care insurance companies.
When hospitals have such a revenue reduction, two things happen: Services are reduced and expenses are reduced in the form of staffing.
According to a new IMPLAN report “The Economic Impact of Potential Losses to Oklahoma Hospitals,” the potential impact of an expected $480 million loss to the hospital industry has tremendous ramifications on the entire state’s economy.
Because the loss of every one direct hospital job is related to a loss of an additional 1.1 jobs in other industries, the report predicts almost 5,500 jobs and $343 million in wages could be lost.
In addition, local, state and federal governments could lose $92 million in tax revenue, including everything from sales tax to income tax.
The top five industries that will be impacted by a potential $904 million in potential loss in output to the state are real estate, employment services, housing, insurance and restaurants.
Medicaid outsourcing affects more than just hospitals. I do not know of a single health care professional who is in favor of this proposal.
As the business community and local government officials begin to understand how far reaching the adverse impact could be on local and state economies, how could they be supportive of this proposal either?
Editor's Note: Jimmy Leopard is the chief executive officer of the Wagoner Community Hospital.
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