Millions of Americans who were previously uninsured are expected to obtain coverage as a result of the Affordable Care Act, but hospitals that treat a large number of patients without coverage will feel the pain of pending cuts to a federal program that provides compensatory payments.
Cuts to the disproportionate share hospital (DSH) program go into effect on Oct. 1, the first day of the 2014 fiscal year, even though it could be months or years before many of the uninsured obtain coverage. Altogether, about $30 billion will be cut from DSH payments over the next decade.
"I'm concerned that reducing DSH before we even know what the impact of the (Affordable Care Act) will be is a bit premature," Chris Van Gorder, chief executive officer of San Diego-based Scripps Health, told the San Diego Union-Tribune.
"This puts our safety-net hospitals serving our most vulnerable patient populations at risk. Most operate at a loss, supported by other system hospitals, or with very small operating margins."
According to the Union-Tribune, several hospitals in the San Diego area receive up to 5 percent of their overall revenue from DSH funds.
Safety-net hospitals in other parts of the country are also bracing for DSH-related cuts. Lakeland Regional Medical Center in Florida is expected to lose $8 million a year from the DSH program, reported the Lakeland Ledger.