Report: ACA repeal could cost hospitals billions

A repeal of the ACA could come at a cost for the hospitals and health networks that are still adapting to it, according to a new report.

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With a Republican-controlled Congress and a Donald Trump presidency on tap, it looks likely that the Affordable Care Act, or at least large parts of it, will be repealed—but that could come at a cost for the hospitals and health networks that are still adapting to it.

The American Hospital Association and the Federation of American Hospitals teamed up to take a deeper dive into the financial implications of a repeal of the ACA. The report (PDF), released today, estimates that the net impact on hospitals between 2018 and 2026 would be about $165 billion in the event of a repeal that reinstates rollbacks on Medicare and Medicaid payments that were included in the ACA.

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The outlook is more dire if those reductions are not restored, according to the report, as hospitals would suffer an additional loss of about $289 billion during that same time period.

“Losses of this magnitude cannot be sustained and will adversely impact patients’ access to care, decimate hospitals’ and health systems’ ability to provide services, weaken local economies that hospitals help sustain and grow and result in massive job losses,” AHA President Rick Pollack and Federation President Chip Kahn said in a statement read at a press conference Tuesday.

The analysis, conducted by healthcare economics consulting firm Dobson, DaVanzo and Associates, was based on the potential impacts of House bill H.R. 3762, an attempt by Republicans in Congress to repeal the ACA in December 2015 that was vetoed by President Barack Obama earlier this year. The provisions in that bill offer a glimpse of what a repeal effort might look like, and it did not reinstate cuts to Medicare and Medicaid payouts, according to the report.

The study makes it clear that leaders in Congress must have a replacement plan in place simultaneously if they choose to appeal the ACA, which appears to be one of the first items on the docket for Republicans early next year. Joann Anderson, CEO of Southeastern Health in Lumberton, North Carolina, said at the press conference that her hospital is in a region where patients benefited significantly from the increased coverage options under the ACA, even though the hospital itself was hit hard by the Medicare and Medicaid payment reductions.

The ACA also required a significant number of new programs and services, and having to reevaluate all of those could be a large burden for facilities, especially in rural areas, she said. To understand the burden of repealing and not replacing the ACA, imagine “going through another period of rapid change," she said.

The AHA and FAH both called on congressional leaders to engage with hospitals in designing a replacement for the ACA and determining next steps. Kahn said at the conference that industry leaders do not see the momentum toward a repeal as a possible setback, as political leaders have turned to the healthcare industry for help in drafting key legislation.

The consultants also analyzed overall federal payment reductions to hospitals, which they detail in the following infographic:

AHA hospital cuts infographic