As more people gain coverage, safety-net hospitals still struggle

Even as the number of insured Americans increases post-Affordable Care Act, the benefits aren't trickling down to disproportionate share hospitals (DSH), which will feel the brunt of ACA-mandated cuts in the next few years, according to U.S. News & World Report.

Two new reports this month analyzed how the ACA will affect safety-net hospitals in New York City and Kentucky, respectively. In both locations, safety-net hospitals serve both low-income patients and undocumented immigrants, meaning hospitals will not recoup projected expenses and are at the most risk from upcoming DSH cuts.

The New York report from City Comptroller Scott Stringer found lower-than-expected coverage increases will leave the city's safety-net hospitals facing a 24 percent drop in DSH revenue. To offset these shortfalls, Stringer called for insurers to allow undocumented immigrants to buy plans through online marketplaces.

The Kentucky Hospital Association's report, meanwhile, analyzed all the state's hospitals rather than just safety-net providers, and projected costs of nearly $7 billion over the next nine years and a $1 billion net loss by the end of the decade.

Similarly, in Colorado, more than a third of the state's total payments go to Denver Health, which is left with a $250 million bill from the uninsured patients it treats, Peg Burnette, Denver Health and Hospital Authority's chief financial officer, told U.S. News. While Medicaid expansion in some states has increased coverage nationwide, this doesn't solve the cost problem for hospitals, as the program reimburses them at a significantly lower rate than does private insurance.

Meanwhile, in the 22 states that have not expanded the program, hospitals are at even greater financial risk, as the federal government planned the DHS cuts expecting all states to expand Medicaid. And even once the ACA's enrollment portion concludes next year, 27 million people are projected to remain uninsured, most of whom will be part of safety-net hospitals' patient population.

Safety-net providers also hope to convince Congress to further delay Medicaid cuts as it has done several times in response to some states' failure to expand the program, according to the article. "We are happy that they have been pushed back, but we would like to see [planned cuts] repealed," Nancy Galvagni, senior vice president at the Kentucky Hospital Association, told U.S. News. "The revenue was expected to be greater than the cuts, but in our state that hasn't been the case."

To learn more:
- read the U.S. News article
- here's the New York report (.pdf)
- check out the KHA report (.pdf)