Minnesota health-care bill targets Duluth's St. Mary’s for indigent care

A compromise bill that seems set to pass the Minnesota Legislature on Thursday threatens to turn St. Mary’s Medical Center into the region’s health-care provider for the poor, local legislators say.

“It will turn St. Mary’s into the Cook County [Ill.] Hospital of the Arrowhead,” said Rep. Roger Reinert, DFL-Duluth.

The representative who helped to negotiate the compromise, Rep. Tom Huntley, agrees.

“The way it is now, it will not be good for SMDC,” Huntley said. “It’ll turn SMDC into a magnet [for the poor].”

Still, both Reinert and Huntley said they’ll vote to approve the bill because it saves the fund that provides health care for people with very low incomes, and both said it’s likely to pass.

“I’ll reluctantly vote for it,” Reinert said.

The compromise came out of trying to save General Assistance Medical Care, Huntley said, which provides health care for childless adults earning $8,000 or less, and which Gov. Tim Pawlenty cut out of his budget. Later he vetoed a bill that would have restored the spending.

Huntley, along with other legislative health-care leaders, reached a compromise that would provide GAMC reimbursement for 17 hospitals in the state that would be designated as Coordinated Care Organizations.

St. Mary’s Medical Center would be the only designated hospital in Northeastern Minnesota to receive that reimbursement.

Area health-care providers would essentially be asked to funnel GAMC patients to St. Mary’s, the largest hospital with the SMDC Health System, Reinert said. And reimbursement for those services, Reinert said, would only cover a third of the hospital’s costs for serving those patients.

What’s worse, said Huntley, is that if a GAMC patient goes to another provider in the region, SMDC will have to reimburse that hospital for its costs.

The majority of the 32,000 patients on GAMC have mental or physical health issues that prevent them from working. St. Louis County has the highest percentage of GAMC enrollees in the state, according to the Department of Human Services.

Huntley said the concept behind making SMDC the primary-care center for the impoverished is a good one, but funding and reimbursement for the care is so low “that it won’t work.”

SMDC administrators have lobbied against the bill, saying it could cost the hospital millions as well as being a poor model for patient care by reducing GAMC recipients’ access to health care.

The hospital looks to lose even more than the $8 million it lost last year in providing care for GAMC patients, said Dr. Thomas Patnoe, SMDC’s president and chief medical officer, as the pool of money the state provided to treat those patients will shrink from $20 million to $2 million.

To make up for those losses, patients with private insurance could see higher costs, Patnoe said.

The president of the Minnesota Hospital Association, Lawrence Massa, agrees.

“Hospitals will pass on costs to the private insurers,” Massa said. “And that will affect premiums.”

Patnoe also said it would essentially force poor patients who live as far away as the Iron Range to get their primary care in Duluth, which would probably discourage those patients from getting care.

“We’re more than willing to take great care of this population,” he said, “but it doesn’t seem right to channel folks [to Duluth].”

Patnoe also argues that as a Coordinated Care Organization, SMDC will be forced to take on the role of negotiating prices with other care providers, a role similar to that of an insurance company and one the health-care system doesn’t want.

Huntley said he hopes that federal health-care reform will pass soon and provide bailout money for the GAMC program. If that doesn’t happen and the state legislation passes, Reinert said, the GAMC compromise will last for 16 months.

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