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State hospital subsidies need to be revamped according to analyst

Presbyterian Hospital near Downtown Albuquerque.
Shelby Wyatt
Source New Mexico
Presbyterian Hospital near Downtown Albuquerque.

Hospitals in New Mexico are facing financial challenges, with concerns about profitability and sustainability. During a legislative health and human services committee meeting Monday, the committee discussed ways to better manage and hold hospitals accountable.

New Mexico hospitals receive financial assistance from both the state and federal governments, but those funds are being dispersed unevenly between non urban and urban hospitals.

According to a report from the Legislative Finance Committee (LFC), those funds are likely to help hospitals that are larger and more profitable, than hospitals that are experiencing negative profitability.

The governor signed SB17 in March, now known as the Health Care Delivery and Access Act, which creates a financial assessment on hospitals that is then pooled, matched with federal Medicaid dollars, and reallocated to hospitals.

Allegra Hernandez, senior Fiscal Analyst for the LFC, said the problem is the act targets hospitals based on the number of beds and performance.

“ meaning that larger hospitals will get a bigger share,” she said.

Rehoboth McKinley Christian Hospital lost $20 million in 2022 and will only receive a little more than $6.5 million from the act. In contrast, Eastern New Mexico Medical Center experienced a 12% net gain in 2022 and will receive more than $37 million from the act. Eastern earned close to $80 million in 2022.

Hernandez recommends the state hold hospitals accountable for the funds they receive.

“Make certain hospitals only receive funds if performance improves for New Mexicans served,” she said.

State Rep. Eleanor Chavez, D-Bernalillo, said health care in New Mexico has been a for-profit industry and that needs t0 change.

“Healthcare should not be for profit. That's getting us into trouble,” she said.

She added that she was concerned about the amount of money the state is giving right now.

“The reality is that we don't have any control over that,” she said.

She recommended looking into global budgets that would create a fixed annual budget for hospitals, which would provide flexibility to improve quality and health equity.

The committee concluded that further discussions with the state’s newly formed Health Care Authority is needed and requested a follow up meeting on the topic.

Support for this coverage comes from the Thornburg Foundation.

Jeanette DeDios is from the Jicarilla Apache and Diné Nations and grew up in Albuquerque, NM. She graduated from the University of New Mexico in 2022 where she earned a bachelor’s degree in Multimedia Journalism, English and Film. She’s a former Local News Fund Fellow. Jeanette can be contacted at jeanettededios@kunm.org or via Twitter @JeanetteDeDios.
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