The Michigan health industry was shocked this week by the closing of the community hospital in Cheboygan after a deal with McLaren Health Care broke down late Monday.
Industry analysts say hospitals all over are facing increasing budget pressure as payment rates drop from the government insurers: Medicare and Medicaid. Meanwhile, State health officials are currently reviewing new options for funding hospital-based long-term care and nursing home care.
The long-term care unit was the first unit to close at the bankrupt Cheboygan Memorial Hospital. It had 41 patients, many on Medicaid.
"It's a critical service. Also, as the population is aging we're going to see an increasing demand for those kinds of services. But it's very difficult to make them financially stand on their own," says Marianne Udow-Phillips with the Center for Healthcare Research and Transformation at the University of Michigan. She was speaking Friday morning on IPR's call-in show, Points North.
Meanwhile, an AARP report just released says Michigan's Medicaid dollars would go farther if the state "rebalanced" its spending on long-term care. It says the state could pay for three people to get care at home for the cost of caring for one patient in the nursing home.
"We know that seniors want to stay in their homes," says Robert Kolt, the state president of the AARP. "We know we have to reduce the cost. We have some specific ideas to save money. Here's how other states have done it. Here's how we propose Michigan do it in the future."
The Health Care Association of Michigan, the state's largest nursing home trade group, agrees that patients who can stay home should have that option. But the group is concerned there's not enough supervision to insure healthcare quality for patients who stay home.
"If you're going to put the dollars there, make sure what you're paying for you're getting," says Health Care Association Vice President Pat Anderson.