​​​​​​​Hospitals postpone projects, hiring amid AHCA uncertainty

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Hospitals are holding off on projects amidst uncertainty under the GOP's plans to repeal and replace the Affordable Care Act. Image: jansucko/iStock/Getty Images Plus/Getty Images

As debate continues in Congress over the American Health Care Act (AHCA), the uncertain future of healthcare reform has pushed a number of hospitals to postpone projects or hold off on hiring.

Denver Health Medical Center, for instance, will push back nearly $74 million in new construction projects until the regulatory path becomes more clear, according to an article from Reuters. Those projects would have benefited low-income patients that gained insurance under the Affordable Care Act (ACA).

"We want to know what will happen with the Medicaid expansion population, and what will be the timeline for that," Peg Burnette, Denver Health’s chief financial officer, told the news agency. "Due to the uncertainty, we're not going to issue new debt. We have no plans for that in the near future."

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Denver Health is not the only provider looking at such measures, according to the article. The University of Alabama at Birmingham Health System is holding off on nonclinical hires to cut costs, and the Kingman Regional Medical Center in Arizona is renegotiating contracts with medical suppliers and service providers.

 

The industry has expressed many concerns about the Republicans' proposed bill to replace the ACA, particularly provisions that would impact Medicaid expansion. The American Hospital Association launched a campaign last week to encourage its members to contact legislators and share their worries.

AHA President Rick Pollack told Marketplace that if patients on Medicaid widely lose their insurance coverage, the impact on hospitals could be huge. Facilities in especially dire financial straights may be forced to close, while others would reduce staff or services, as uncompensated care costs rise. Jill Horowitz, a University of California Los Angeles law professor, told the publication that cash-strapped hospitals could order unnecessary tests and procedures to increase revenue.

“It’s important not to say they are rapacious doctors and horrible hospitals, and they are trying to squeeze every last dollar out of you,” Horowitz said. “But it would be silly to think that hospitals and doctors don’t respond to those incentives. They have to.”

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The uncertainty has also been felt in the hospital stock market, according to an article from Bloomberg. Investors are banking on the likelihood that the bill will not pass, or are hoping the Senate will craft a more appealing proposal.

Hospital stocks surged in the early years under the ACA, according to the article, but dropped beginning in late 2015. The hospital stock market has been especially volatile since President Donald Trump was elected in November.