Hospital threatens job cuts ahead of budget debate


JEFFERSON CITY, Mo. — At least one hospital says they’ll be forced to lay off workers and slash services if lawmakers advance the Senate version of the state’s FY2016 budget.

Lawmakers are reconvening in the Missouri Capitol this week with one big mountain to climb: the state’s $26 billion budget, which Republican leaders were hoping to send to Gov. Jay Nixon’s desk early this year in an effort to override line-item vetoes before legislators break for the summer.

Lakeland Behavioral Health System provides a range of mental health services in the Springfield area, and sources told local news outlets that they would be forced to cut roughly 100 jobs and eliminate 30-50 percent of its hospital beds to accommodate the roughly $130 million in cuts to state social services spending in the Senate version of the budget.

The announcement adds more heat to an already contentious backroom battle between House leaders and Sen. Kurt Schaefer, R-Columbia, who is chairman of the Senate Appropriations Committee. Schaefer authored a “lump-sum” approach to the budget for Missouri’s Department’s of Social Services, Mental Health and Health and Senior Services.

Rather than appropriate funds for individual line items, Schaefer is giving each department a lump-sum after pairing down their annual increase requests, and leaving it up to those same departments to make their own choices about spending priorities. The move stems from the longtime arm wrestling between department officials and lawmakers working on the budget. Elected officials tend to accuse departments of dragging their feet or being disingenuous when providing their internal budget details, while department officials say lawmakers are more interested in the political implications of their budget decisions, rather than the impact on necessary services.

Nixon blasted the cuts as irresponsible given the uptick in state revenues and called on lawmakers to restore them. Schaefer — a candidate for attorney general in 2016 — has repeatedly stated that his budget represents core conservative values of reigning in welfare spending, and says his move to shift about 200,000 Missouri Medicaid recipients to managed care plans will save the state millions in future years.

The shift to managed care is largely the reason that facilities like Lakeland are worried. Dave Dillon, a spokesperson for the Missouri Hospital Association, said managed care companies traditionally don’t have a great track record in providing behavior health services.


“One of the things we’ve seen with managed care on the behavioral health side is that it’s simply very hard to find people who will offer those services,” Dillon said. “It’s very difficult to find a dedicated behavioral health bed in Missouri, and managed care hurts the provider community even more. It’s not just behavioral health it’s about caregivers. We need to be able to, as a state, attract good caregivers,”

Dillon said the shift to managed care would also throw the delicate balance of Medicaid funding out-of-whack. Hospitals and other traditional healthcare providers use some of the funds they get from the state for providing Medicaid services to pay a “provider tax” back to the state. That tax is marked specifically to go to the federal government for matching Medicaid dollars, which in turn go right back to the state and healthcare providers.

Managed care companies do not pay a provider tax, and putting millions of state funds into them, rather than hospitals that do, will create a ripple effect that shakes Medicaid funding across the state, Dillon said.

“It’s us eating our seed corn,” Dillon said.

House and Senate lawmakers will continue to wrangle the differences between their two budgets in conference committees this week. Senate Pro Tem Tom Dempsey, R-St. Charles, reiterated on This Week In Missouri Politics on Sunday that he wasn’t particularly keen on lump-sum budgeting, but that he believed Schaefer was trying to do the right thing by reining in spending.


Collin Reischman

Collin Reischman is the Managing Editor for The Missouri Times, and a graduate of Webster University with a Bachelor of Arts in Journalism. To contact Collin, email or via Twitter at @CMReischman

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