Pillen’s budget line-item vetoes raise questions for rural healthcare

LINCOLN, Neb. (KOLN) - Governor Jim Pillen said the $140 million he cut from the state budget with line item vetoes was excessive spending, but many of the most impacted organizations argue important services rely on those funds.

55% of Nebraska hospitals are running in the red right now, facing the dual pinch of rising costs of equipment and labor.

“As far as workforce and cost increase challenges, this ranks right up there with some of the toughest we’ve really faced,” said Jim Ulrich, the CEO of York General Hospital.

That’s why in the wake of Pillen’s wide-ranging line-item vetoes, some healthcare organizations and providers are sounding the alarm.

“Hospitals can close,” said Jeremy Nordquist the President of the Nebraska Hospital Association. “Certainly services can be cut. and that’s why we’ve got to make sure that we keep paying enough to sustain hospital services in rural Nebraska.”

Healthcare professionals are focused on a veto regarding the Medicaid reimbursement rate. Pillen wants to increase it by 3% next year but keep it flat the year after that, meaning $15 million in state and $30 million in federal funding won’t be available to providers in the state.

“Mandates that took place through the pandemic that increased our healthcare costs,” Pillen said Thursday. “We have to get back to normal quickly, and we have to be able to run our hospitals more efficiently. more money is not going to solve those problems.”

But margins for the minority of hospitals that stay out of the red are often paper thin. That’s the case at York General Hospital.

“All of our dollars that we put on the bottom line get re-invested back into our organization for needed improvements and paying the salary increases that are of huge demand today in our labor market,” Ulrich said.

Ulrich said the 3% increase next year was a compromise that didn’t go far enough. Now, with the flat rate the year after that, he is afraid York General may have to dip into its reserve fund or consider cutting some services.

The Nebraska Hospital Association said it’s working to get state senators to override that veto.

The vote could take place next Wednesday or Thursday, and it would require support from 30 senators.

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