It's going to be a tricky procedure, but the necessary effort to wean Erie County Medical Center off its public subsidy is under way.
County Executive Joel A. Giambra has committed much of the county's revenue from the tobacco settlement to keeping the hospital afloat while looking for ways to cut costs and increase revenues. Meanwhile, Sheila K. Kee, interim chief executive officer at ECMC, also has publicly committed herself to staunching the flow of red ink. Nearly as important, she and Giambra appear to be willing to work together on this important project.
How important is it? Consider these numbers provided by County Budget Director Joseph Passafiume show.
While the subsidy had once been equal to or less than the hospital's debt-service payments, the subsidy blew past that benchmark figure in 1998, when the subsidy was $16.1 million, compared to the debt payment of $10.6 million. Without action, next year's subsidy is projected to be $22 million, or about 7 percent of the hospital's $300 million budget.
For the fiscal health of the county, the growth in this subsidy needs to be stemmed.
Balancing the books is an especially daunting task for hospitals, which are under pressure from the Balanced Budget Act of 1997 -- which cut federal reimbursements -- managed care plans and other sources. Add to that mix the inevitable community apprehensions about the loss of quality care for those who can't afford to pay for medical treatment, and the effort could scare off any politician.
It is to the credit of Giambra and the Legislature's Democratic leadership that they have decided to grapple with this monster. By directing much of the tobacco money toward ECMC, they have relieved tax pressure on county residents while buying about 10 years to restructure the hospital. In the end, though, that's not much time. It is important to start now.
That's why Giambra is wise to begin cutting the subsidy immediately. It will focus attention by sending a clear message that this train is leaving the station. This needs to be a broad-based discussion that involves all hospitals in the county about how best to serve the community by squeezing out overcapacity and identifying areas of needless duplication.
Hospital officials also need to make a concerted effort to ensure that uninsured patients who qualify for Medicaid or the state's new Family Health Plus program are signed up. If there is a concern about the escalating public costs of running this hospital, there can be no excuse for failing to take advantage of existing mechanisms that can cut into the county subsidy.