State Budget Acting Director backs Gov's Medicaid and pension reforms

By Anna Yee

May 7, 2012 Updated May 7, 2012 at 9:26 PM CDT

PEORIA, Ill. -- Now is the 'moment of truth' for the state's economic future and the future of millions affected by the Medicaid and pension systems.

That's according to David Vaught, the Illinois Department of Commerce and Economic Opportunity Acting Director.

Vaught was in Peoria Monday afternoon, pushing business leaders to support the Governor's proposed reforms to public pension and Medicaid before this legislative session is up at the end of the month.

Vaught says without cuts to these systems, other areas will suffer.

"We cannot build a strong educational base if we have these uncontrollable costs to pension and Medicaid squeezing everything else out," said Vaught. "Our capital program will suffer even if we can continue it... and we'll have uncertainty. We'll have business uncertainty for all our businesses."

Reforms include cuts to Medicaid programs and provider rates and a cigarette tax hike.

Peoria-area healthcare executives from OSF Healthcare System and Methodist and Proctor Hospitals spoke out Monday.

They say the cuts will impact the level of service, which is already suffering from the state's millions of dollars in late payments.

"As the other two hospitals have commented, we're still owed monies from 2010 as well as all of 2011," said Todd Baker, Proctor Hospital's V.P. Strategy & Business Development.

"It just makes our challenges that much more challenging to meet on a day in and day out basis," he said.

"What they're proposing is to continue to cut a broken system," said said Tara Canty, COO of ACO and senior V.P. of government relations for OSF Healthcare System, "so they're going to cut, and further break, and cut back on services."

Rob Quinn, Methodist's CFO and V.P. of Finance, says comprehensive alternative options need to be brought forth to the Governor.

Vaught says he backs the Governor's proposals, which are meant to be reasonable solutions, especially for the Medicaid issue.

"We have a Medicaid system where are costs are going up 6% a year already," said Vaught. "Our economy is growing at 2% a year. That's part of what's not sustainable in Medicaid, and that can't go on forever."

Vaught is asking leaders to show their support before the General Assembly votes later this month.

The legislative session is set to end May 31st.

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