Possible deep cuts in state education funding have received most of the attention as the Texas Legislature grapples to balance the budget. But a proposed 33 percent cut to Medicaid could cripple the state’s health care system and leave rural hospitals, including Glen Rose’s, in danger of closing.

That was one of the conclusions at last week’s county Hospital Authority Board meeting.

Gary Marks, the medical center’s chief executive officer, presented a review of potential Texas Medicaid cuts as legislators contend with a projected state budget shortfall of $27.5 billion.

Because public education and health care — especially Medicaid — are the largest expense items in the budget, they are the areas targeted for the deepest cuts.

“Austin is not a happy place right now,” County Judge Mike Ford told the board after returning from a trip to the capital to speak to lawmakers about the budget crisis.

Ironically, for all the money Texas spends, it ranks 49th in the United States in reimbursement for nursing home care, Marks pointed out.

“So nursing homes in Texas are required to meet federal regulations while receiving significantly less money,” Marks told the board.

The federal government funds $1.50 for every $1 Texas spends on Medicaid.

“Therefore, if Texas cuts $10 billion out of the budget, the federal government cuts $15 of funding to Texas,” Marks said. That brings the total Medicaid impact to $25 billion.

In fiscal year 2011, Medicaid funded 70 percent of patient days, or $2.1 million, at the nursing home.

With a 33 percent Medicaid cut, the nursing home could lose $706,257 in reimbursement and the hospital $25,282, for a total of $730,539.

With a 10 percent cut, the nursing home would lose $214,017 and hospital $7,358, for a total impact of $221,375 less reimbursement.

The Texas Association of Homes and Services for the Aging estimates that 80 percent of the state's 1,054 nursing homes would close and more than 60,000 residents would lose care if Medicaid were cut by a third.

“What a burden that would place on our society,” said Mo Sheldon, interim administrator of Glen Rose's nursing home.

Those nursing homes that manage to stay open if Medicaid were severely cut would likely will be able to provide only a “minimal” level of care, Marks said.

Health care officials expect that many physicians will stop seeing Medicaid patients — and some already have — and that more Medicaid patients will go to emergency rooms for treatment, placing even more financial pressure on hospitals.