Though Sitka Community Hospital was recently sold to SEARHC, and hospital leadership is hopeful for increasing services provided to Sitkans, cuts to Medicaid expansion and reimbursement could have a negative impact (KCAW/KWONG)

In response to the state’s $1.6 billion dollar spending deficit, Governor Mike Dunleavy has proposed a budget with big cuts to education, the arts, social services, and Medicaid. Earlier this month, the University of Alaska Southeast invited community organizations to its Sitka campus to discuss how state funding cuts would affect them.

In part three of our series revisiting that conversation, KCAW’s Katherine Rose reports on the healthcare panel:

Listen: Part 1- Education

Listen: Part 2- Nonprofits

Cuts to Medicaid and Medicaid expansion were at the top of every panelist’s list during the forum, which included representatives from Sitka Community Hospital, Center for Community, SAIL, Sitka Counseling, and Brave Heart Volunteers.

The panel occurred just days before the Sitka Assembly voted to sell Sitka Community Hospital to the Southeast Alaska Regional Health Consortium (SEARHC). Sitka Community’s director of operations Steve Hartford said the hospital was excited about the opportunities the merger would bring for expanding services, but it coincided with a major threat to funding.

“A deep cut in Medicaid which will also push away from Sitka, and the state, hundreds of millions of dollars of federal money,” Hartford said.

More than a quarter of the state’s population is covered by Medicaid, and the federal government pays a percentage of each state’s Medicaid cost, but it’s still one of the biggest expenses in Alaska’s state budget. Gov. Dunleavy wants to cut the program by $249 million, reducing the state’s reimbursement to providers, which is twice the national average.

Medicaid expansion in 2015 allowed hospitals to serve more people without taking a loss, Hartford said.

“Since that time, we have, at Sitka Community Hospital, we have been able to sign up 61 individuals that had, all together several hundred thousand dollars of care that they wouldn’t be able to have, and also wouldn’t have been able to be provided in the community,” he said.
“These are not poor people, these are average wage earners in the community.”

Nonprofits in the healthcare field could be affected by the cuts too, including some that operate on a shoestring budget. Cheri Hample is the co-chair of Brave Heart Volunteers, which does not bill for its services.

“We’ve been able to do this for 17 years and not charge for our services,” Hample said. “This could mean that we would be in a position of having to look at generating income in order to continue to pay our one full-time staff person and keep our office going.”

Hample says Brave Heart has over 200 volunteers who provide respite and relief,  and end of life care, as well as provide training and lead a caregivers support group. Budget cuts, said Hample, could drastically affect one organization in particular that Brave Heart provides many services for.

“The Pioneers Home is already struggling with being short-staffed. This budget would devastate the Pioneers Home and those people who are waiting to get into the Pioneers Home,” she said.

Under the Dunleavy budget, state funding for pioneers homes could be cut and resident rates would increase to make up the difference. Dunleavy has set aside a $15 million dollar fund for seniors who can’t afford payments.

“To call the governor’s budget draconian is a bit of an understatement from our perspective. It’s far more than harsh, despotic and iron-fisted. It’s also fool-hardy and in my opinion quite reckless,” said Brian O’Callaghan.

O’Callaghan runs the Center for Community, a statewide nonprofit headquartered in Sitka that provides a variety of services including early infant learning for toddlers, supported living, and in-home services for seniors, and oversees the Welfare to Work program for all of Southeast Alaska. The center also partners with the Sitka Tribe to provide transportation services, like “The Ride” and “Care-a-Van.”

O’Callaghan says the governor’s budget is a step backwards.

“This will bust us back to the year 2013 in terms of our reimbursement rates. That’s ridiculous,” he said. “Right now we’re reimbursed 25 dollars per hour for changing diapers and providing personal care,” he said. “They want to bring us back to 23 dollars and 72 cents.”

Amy Zanuzoski of Sitka Counseling has 47 full-time employees, and operates on a $3.5 million dollar budget. $1.5 million comes from the state.

“We could lose a lot of different services. I think it was 3 or 4 years ago when the Medicaid reform came out we were able to provide more coverage through Medicaid for people with substance abuse issues looking for treatment, people with severe mental  illness that were coming in needing day-to-day support,” she said.

No one on the panel saw an upside to the governor’s budget cuts. As Brave Heart’s Cheri Hample said “Our work is the work of the heart. You can’t put any dollar sign on the heart.” But as the legislature and the governor appear headed toward a standoff, health care providers in Sitka might be thinking how to keep that heart pumping with less funding in the future.

Missed the panel discussion? Watch KCAW’s Facebook livestream here.