Rural hospitals at risk as Arizona faces billions in Medicaid cuts

YUMA, AZ (AZFamily) — The Arizona Hospital and Healthcare Association is sounding the alarm on Medicaid cuts recently signed into law that could cost Arizona hospitals $6 billion over the next seven years. They say rural communities will be the hardest hit.

“We’re talking about taking away millions of dollars from hospitals every single year,” said Helena Whitney, the association’s vice president. “There is no other option but to cut services and to cut staff.”

The organization estimates that by year three, half of Arizona’s hospitals will be operating in the red, as uncompensated care rises and funding falls.

“When people don’t have health insurance, they still show up through the emergency department and hospitals still have to treat them. We call that uncompensated care,” said Whitney.

Nearly 2 million Arizonans currently rely on AHCCCS, the state’s Medicaid program. Under the budget cuts, close to 400,000 Arizonans could lose their coverage, placing even more pressure on hospitals already stretched thin.

In rural areas like Yuma, where Onvida Health is the region’s primary medical provider, the impact could be severe. CEO Robert Trenschel said about a quarter of Onvida’s patients rely on Medicaid, while roughly half use Medicare.

“It won’t just affect Medicaid patients, it will affect all patients,” Trenschel said.

Though Onvida isn’t planning any immediate cuts to services or clinics, Trenschel said the future is uncertain.

“We don’t know exactly what those cuts are going to be yet or how much, but we do know it will be millions of dollars for our organization as well as other hospitals in the state of Arizona,” he said.

Onvida currently operates on 2–3% margins, with a growing portion of care already going uncompensated. Trenschel said there’s still time until these cuts make an impact and right now they’re preparing and doing what they can to boost revenue.

Without real support, Whitney said, rural families could soon find themselves driving hours for basic medical care.

“I grew up in Sierra Vista, Arizona,” she said. “If that hospital had to close some of its services, then the only option is to get in your car and drive to Tucson. That’s about a two-hour drive.”

Whitney said that for many in Arizona’s rural communities, that long drive could soon become a reality to get medical care.

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