The $27.148 billion 2011-12 state budget, signed June 30 by Gov. Tom Corbett, represents a decrease of $1.1 billion (4 percent) from last year. It contains no new taxes but deep spending cuts to higher education, welfare programs, and economic development, though most cuts are less significant than the governor initially proposed.
With the first on-time state budget in eight years, state spending is reset to near 2008-09 levels.
While Pennsylvania Medical Society (PAMED) leadership continues to work with the administration to address the budget’s long-term implications for physicians and patients, following is a summary of key aspects:
Department of Education
Many programs in Gov. Corbett’s original budget proposal for higher education were to be cut in half or eliminated completely, which would have had a significant impact on the state’s academic medical schools.
The good news is that some of these funds have been restored. Payments to academic medical centers that fund the medical schools at Temple, Penn State, and University of Pittsburgh were decreased by 34.4 percent, as opposed to the governor’s proposal to eliminate funding completely.
Physician practice plan payments that fund the medical schools at Drexel, Thomas Jefferson, and University of Pennsylvania received a 50 percent cut.
The budget restores $3 million in state funds for three additional academic medical centers: Commonwealth Medical College in Scranton, Philadelphia College of Osteopathic Medicine, and Lake Erie College of Osteopathic Medicine.
Department of Health
Grants and subsidies for organ donation awareness have been eliminated and funding for diabetes programs saw a decrease of 47.4 percent. Grants and subsidies for patient-centered medical home initiatives and other projects saw an appropriation decrease of 2.9 percent. Other decreases include maternal and child health (a decrease of 63.5 percent) and regional poison control centers (a decrease of 27 percent).
Department of Public Welfare
The Department of Public Welfare (DPW) saw a slight decrease of .5 percent in total funding. The budget cuts hospital payments for obstetric and neonatal services, burn centers, critical access hospitals, trauma centers, and uncompensated care, reducing state funds by $12 million from the funds available in 2010-11.
Funds for mental health services increased slightly by 3.1 percent, raising the final budget to almost $717 million.
The budget gives DPW discretionary authority to move monies around within appropriations so added cuts may occur. The state’s welfare code gave DPW expanded authority to make these changes for one year. PAMED will be meeting with department officials to help determine how that will be implemented.
One of the largest cost-containment reforms involves Medical Assistance (MA). In 2011-12, the MA program will provide health care and long-term care services to more than 2.2 million Pennsylvanians, a 4.5 percent increase over the prior year, while making changes to expenditures within the appropriations.
Department of Insurance
One of the biggest changes for the Insurance Department is the expiration of
adultBasic that forced approximately 42,000 people to either pay more for coverage, or become uninsured. The Children’s Health Insurance Administration will see the redirection of shared information technology contracts previously funded in the adult health insurance administration appropriation.
Funding for the Children’s Health Insurance Program (CHIP) remains at approximately $97 million. CHIP is projected to serve an average of 201,000 uninsured children in 2011-12.
Executive Offices
Three executive offices that affect health care are impacted by the budget. The Office of Health Care Reform has been eliminated. The Pennsylvania Health Information Exchange saw a decrease of 10 percent and chronic care management has been redirected to the Department of Health.
Other Programs and Initiatives
The Pennsylvania Health Care Cost Containment Council (
PHC4) will see a slight decrease of approximately 1 percent.
The Independent Regulatory Review Commission (
IRRC) also remains at existing levels of $1.68 million.
Questions on the 2011-12 commonwealth budget should be directed to
Amy Green, associate director of governmental affairs at PAMED.