Hospitals Providing “Safety Net” Services Will be Hurt by Obamacare

For the first time in years a regional “safety net” hospital (serving a high proportion of patients who are homeless, in poverty or in the country illegally) located in the southwest didn’t just break even it actually realized 4% growth. Most attribute this to the number of people signed up for the ACA (Obamacare). Pressures still exist as paying for the remaining uninsured will be difficult. According to US News and health “Though the patients who are not insured dropped from 27 percent in 2013 to 13 percent in 2014, federal cuts mandated by the health care law in coming years will pose financial difficulties.”

The Disproportionate Share Hospital (DSH) program (set up in 1981) currently funds about $20 billion in patient medical expenses who do not have the financial capability to pay for healthcare. Unfortunately, the same healthcare law that saw this large percentage decrease in uninsured is cutting both Medicare and Medicaid portions to this program and within 2017 it will have cut the program by half. The assumption being made is that millions of people will sign up for the ACA program lowering the need fot the DSH payments.

Reports from these types of hospitals are coming in nationwide indicating that the cuts to the DSH compensation payments to these facilities will be more than is compensated for by the increased Obamacare patient registrations. Once again this would put safety net hospitals in financial distress and ultimately lead to reduced care and less access for the poorest among us.

Although this was not an intended outcome of the ACA, many assumptions were made that unfortunately did not, or will not happen. The difficulty here is that so much is dependent upon the statistical guesses that have been made, that changes and/or adjustments to the program cannot be made. This is not good news for us all.