State Budget Cuts Could Hit Hospital


The ripple effect of state budget cuts could cause a big wave to come crashing down on Payson Regional Medical Center.

PRMC is facing a loss of $1,129,185 in funds from the Arizona Health Care Cost Containment System (AHCCCS) — the state’s Medicaid program.

AHCCCS has had to cut the funds to PRMC and other hospitals due to a $45 million budget reduction from 2008 to 2009 it is suffering at the hands of the legislature.

All totaled, the loss to rural hospitals statewide could be $12.2 million. The AHCCCS contribution to the Safe, Accessible, Viable and Efficient rural hospital program is $3.3 million, which is matched by federal funds 3-to-1. This program helps make up the difference between the regulated payments AHCCCS can give hospitals for indigent care and the actual cost of the care.

The impact will be felt beyond the PRMC campus.

“Hospitals are vital to our communities’ health and well-being — and their economic health,” said Chris Wolf, chief executive officer for PRMC.

“Payson Regional Medical Center and other Arizona hospitals play a vital role in our state’s communities, not only for the health care they provide, but also for the economic contribution they make.”

PRMC is one of Payson’s largest employers.

“Every dollar spent by a hospital supports more than $2.16 of additional economic activity,” Wolf said. So, PRMC’s $1.13 million loss would mean about $2.44 million not coming into the coffers of other businesses and service providers in Payson.

The Arizona Hospital and Healthcare Association is lobbying for the cuts to be rescinded or reduced, and Wolf said his industry’s leaders are hopeful the group will be successful.

However, Wolf and his staff have already put measures into place to accommodate the loss. The measures are on the business side of PRMC’s operation, not in patient care.

“We are very conservative in how we maintain our dual role as health care providers and economic engines, but policy decisions also play an important role,” Wolf said.

He and the staff carefully scrutinize programs and services, and reassess costs and benefits in relation to the financial realities of the current environment.

“We also manage both cash and debt carefully to ensure that our overall financial position supports our ability to continue to meet current and future community needs. Some of the resource management decisions we will have to make will be difficult. We will not waver from our commitment to providing quality care and to minimizing the effect on our employees and the community,” Wolf said.

Among the measures in place to deal with the cuts: staffing appropriately to volumes, review of vendor contracts, and employees in nonclinical departments are giving up hours and using vacation time — a practice Wolf said he has heard other agencies are doing throughout the country.

“That really shows our employees’ dedication,” Wolf said.

“PRMC is a stable organization with a long history of providing quality care to our patients,” he said. “We plan on being an important part of our communities’ health and well-being and economic health for many generations to come.

“We appreciate the valuable contributions of our employees, physicians and volunteers, and are confident that our team can meet any challenges ahead, especially with the ongoing support of our local community.”


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