Sequester forces budget cuts

Story by – Donna Bach, Public Relations Director

September 12, 2013 - 7 minutes read

Over the last year, the Yukon Kuskokwim Health Corporation’s Board of Directors and Senior Leadership Team have been actively monitoring the Federal government’s budget sequester and how it will impact our services and workforce.

As part of the Budget Control Act of 2012, a series of spending cuts, called sequestration, cut approximately $85 billion across the Federal government for the remainder of the fiscal year ending in September 2013.

YKHC, along with others in Alaska’s Tribal Health system were hit particularly hard with reductions in Indian Health Service funding and grant awards, affecting YKHC’s ability to provide programs and services. YKHC lost approximately $4.3 million for this fiscal year. As a result, we reduced our budget by $4 million and froze hiring and travel for non-critical or non-essential purposes. For our next fiscal year, unless Congress eliminates the budget sequester, YKHC expects to lose an additional $3.4 million for a total of $ 7.7 million over these two fiscal years.

So, what is YKHC doing to mitigate the impact of Sequester?

The increasing cost of providing health care services in rural Alaska, and the nation, is one hurdle YKHC has always been familiar with. Many who reside in Bethel or one of Southwest Alaska’s villages are aware that costs in rural Alaska are outrageously high. For YKHC operations, it is expensive to recruit and retain the number of health care providers and specialists necessary to meet our region’s needs. Anyone who has ever seen a medical bill, or paid for a drum of heating fuel, knows that health care is expensive, and with our state’s high rural energy costs, simply heating our facilities and keeping them warm in the winter can be challenging.

According to YKHC President/CEO Gene Peltola, “Sequester is going to affect YKHC and our operating budget for the next nine years. Our Senior Leadership Team, with guidance from our Board of Directors, is having difficult on-going discussions about where and how we are going to have to tighten our fiscal belts, similar to what the rest of the nation is facing. This will not be an easy task as we move forward, and certainly patient care and quality of service will be impacted tremendously.”

The Alaska Tribal Health Compact was signed on October 1, 1994. YKHC, along with 22 other Tribal entities, took the opportunity and responsibility to own and operate their own health care system. It was a remarkable and historical achievement. As a direct result, YKHC bills for services like any private hospital or health care entity. Because of this unique ownership, many improvements were made, including expansion of health care services, construction of new health clinics, growth in prevention programs and improved health outcomes across all age groups.

Some examples of this growth and YKHC’s success include improved immunization rates for our children, expansion and deployment of our Dental Health Aide Therapy model to lower our dental carries rate, being more proactive in our cancer prevention screening efforts among at-risk populations, and improved retention of health care workers in typically hard to fill positions.

YKHC depends on many sources of federal funding. For example, when an Indian Health Service beneficiary patient has Medicare or Medicaid/Denali KidCare coverage, YKHC receives federal payments for the services provided to that individual. These payments from Medicaid/Medicare make up a significant portion of our third party collections.

Shared Responsibility

“Everyone is going to feel this pinch,” said Peltola. “Because leadership knew there were cuts on the horizon, we issued an across-the-board hiring freeze on all positions except for those that directly affect patient care. We also placed freezes on non-essential travel and on the popular summer hire program to all YKHC employees and departments in April of this year.”

This meant any non-critical program travel was put to an immediate halt, and temporary or seasonal summer hires did not occur. Some YKHC departments, programs and positions are being eliminated and a reduction in force of employees will occur. This reduction in our workforce will affect less than three percent of YKHC’s workforce at this time.

YKHC is actively working within the Alaska Tribal Health System, National Tribal entities, and our respected Alaska Congressional delegation to exempt Indian Health Service (IHS) funds from sequestration in the future. YKHC is not alone in making these across-the-board cuts, it is something that will impact numerous government funded agencies throughout the state.

In a September 4 memo sent to all YKHC employees, Peltola encouraged YKHC to work together to keep costs down, and emphasized that he will continue to communicate to all division managers and employees affected as staff and program reductions occur.

When asked how this will affect patient care, Peltola encouraged patients to focus on prevention efforts, such as by making appointments rather than using the emergency room,  exercising and practicing healthy nutrition habits to manage or prevent medical conditions early on. Stop smoking or chewing tobacco. Take more walks. Get screened early and often if you have a family history of disease incidence. Focus on health prevention while traveling through Bethel and be proactive in engaging with your primary health care provider.

If weather or circumstances deter you from keeping your appointment, cancel in a timely fashion. This will make sure that the appointment will be used by someone who needs it.

“Sequestration is going to impact all of us, and we appreciate your willingness to understand that it is going to affect our work force, and ultimately impact efficiencies in how we deliver our care,” Peltola said.