In light of a massive state budget deficit, the company that runs Medical College of Georgia Hospital and Clinics is preparing to defend its state appropriation from budget-cutters.

While everything is on the table this year in light of a $2 billion deficit, the health system should be able to show its worth and be fine, said Rep. Ben Harbin, R-Evans, chairman of the House Appropriations Committee.

In fact, Mr. Harbin is still hopeful the state will find extra relief for the health system and other trauma providers through a dedicated trauma care network.

At a meeting Wednesday of its executive committee, MCG Health CEO Don Snell told board members the health system would be going to a Senate Appropriations Committee hearing on Dec. 1 to defend its direct appropriation, sometimes referred to as the B Budget appropriation.

It is slated for $34.9 million this fiscal year, a slight increase from the last fiscal year, but down from a high of $37.7 million in Fiscal Year 2002, Mr. Snell said.

It is used to fund Graduate Medical Education at the hospital and clinics, and actually the system loses money on it even with the appropriation, Mr. Snell said. Graduate Medical Education last fiscal year ran up $22 million in direct costs and $43 million in indirect costs. Add in indigent and charity care costs that are part of the teaching mission and the total came to more than $100 million.

Reimbursements from state and federal programs amounted to $49.5 million last year, so even with the appropriation the health system lost $18 million on the teaching programs last year, which is slated to increase to $22 million this fiscal year, Mr. Snell said.

Those numbers, and the state's emphasis on expanding medical education, should help the health system carry the day, Mr. Snell said.

"Once people see the numbers, they say, OK, this is reasonable," Mr. Snell said.

With the deficit the state is facing, "everything has to be on the table," Mr. Harbin said.

But he predicted the health system would make a convincing argument to keep its money. With the high retention rate those graduate programs have, it is a good way to increase the physician population in Georgia, he said.

"That is a huge priority for the state," Mr. Harbin said.

He and other House leaders are eying a quarter-millage property tax paid directly to the state that was used last fiscal year to divert $90 million into trauma funding to help out struggling hospitals.

MCG Health loses about $8 million a year on trauma, Mr. Snell said.

That tax could be used to create a permanent source of funding for a statewide trauma network, which Mr. Harbin would like to do through a constitutional amendment to keep it safe from future legislative raids.

Reach Tom Corwin at (706) 823-3213 or tom.corwin@augustachronicle.com.