INDIANAPOLIS -- The head of an Indiana hospital organization voiced concerns Wednesday about state budget cuts he said could slash services.

The state plans to cut nearly $11 million from its budget, paying hospitals less to treat Medicaid patients, 6News' Stacia Matthews reported.

Because fewer people have insurance due to the economy, more patients are relying on Medicaid, about 15 percent, officials said. For every dollar of care, Medicaid pays Indiana hospitals about 50 cents.

Douglas Leonard, the president of the Indiana Hospital Association, said he's concerned how the organization's 170 members will be able to serve their communities.

"Medicaid is a big-line item. So, we understand this was a necessary cut, but our concern is the cut has repercussions," he said.

Leonard said that hospitals already provide more than $1 billion in free care each year, and that many have already taken steps to keep services, including layoffs, salary freezes, pension contribution and tuition reimbursement eliminations and building project delays.

In 28 mostly rural counties, hospitals have already had to eliminate obstetric departments to cut costs.

Leonard said if hospitals slash more services, both patients and ambulances will have to travel greater distances for care until more revenue becomes available.