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 Seven hundred miles south, the fortunes of Atlanta's primary
public hospital, Grady Health System, haven't improved, and it
remains as dependent as ever on philanthropy and county funding to
stay afloat.
The disparity between the two "safety net" hospitals, both of which
serve a disproportionate share of their communities' poorest
patients, illustrates a growing divide nationwide.
In states like Illinois that have opted to accept federal money to
expand Medicaid, some large, public hospitals are finding themselves
on solid financial footing for the first time in decades, and
formerly uninsured patients are now getting regular care.
But in states that did not expand the government medical program for
the poor, primarily ones with conservative electorates opposed to
Obamacare, including Georgia, the impact of the Affordable Care Act
on public hospitals has been negligible.
While the public exchanges established by the federal government and
14 states have brought coverage to many previously uninsured people
in all parts of the country, the effect on the poorest Americans
varies drastically from state to state.
 Nearly four million low-income, uninsured Americans living in states
that didn't expand Medicaid would have qualified for coverage had
their states chosen to expand it, according to the Kaiser Family
Foundation. And public hospitals in those states, many of which rely
on bond markets for funding, are likely to feel the pinch even more
acutely over time, experts said.
"Providers in these states are going to be at a disadvantage," said
Jim LeBuhn, senior director at Fitch Ratings. "It’s going to make it
that much more challenging for these providers to maintain their
financial profiles."
Since the Affordable Care Act's first open enrollment in 2013, the
number of Americans covered under Medicaid has risen by 21 percent,
to 71.1 million.
Nonprofit hospitals in the 30 states that expanded Medicaid reported
on average 13 percent less bad debt from unpaid bills last year,
according to Moody’s Investors Service. In contrast, according to
Moody's, such "hospitals in non-expansion states saw bad debt
increase through much of the year."
Hospitals in Medicaid expansion states, according to Kaiser,
reported an average 32 percent decrease in uninsured patients and a
40 percent cut in unreimbursed costs of care for patients without
the ability to pay, known in the industry as charity care costs. In
non-expansion states, the number of uninsured patients declined by
4.4 percent and charity care costs dropped by 6.2 percent.
New recipients of Medicaid benefited, too. After one year, adults
who gained the coverage were 55 percent more likely to have their
own doctor than those who did not, Kaiser found. Medicaid also
increased the likelihood of receiving preventive care, such as
mammograms and cholesterol checks.
A TALE OF TWO HOSPITALS
Both Cook County and Grady are safety-net hospitals based in urban
counties where the poverty level is slightly higher than the
national average, and both have handled high numbers of uninsured
clients in recent years: about half of the patients at Cook and
nearly a third at Grady.
Since Obamacare took effect, the numbers at the Georgia hospital
have remained about the same. But things have changed dramatically
at the Illinois hospital, in large part due to the area's enrollment
of about 170,000 of an estimated 330,000 eligible for the expanded
Medicaid.
"This has been a sea change for us,” said Dr. John Jay Shannon, Cook
County Health's chief executive.
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Within two years, the percent of uninsured patients at the hospital
had dropped from more than a half to about a third, almost entirely
driven by increased Medicaid coverage, hospital data show. And for
the first time in the hospital’s history, a majority of the patients
it treated had coverage.
A third of the new Medicaid enrollees treated at Cook County were
patients new to the system. And, hospital administrators say, those
with chronic diseases such as diabetes, who used to be frequent
emergency room visitors, now have personal physicians to help them
manage their conditions.
In the fiscal year ending in November 2014, uncompensated charity
care dropped to $342 million from $500 million the year before.
Funding from Medicaid nearly doubled the health system's operating
revenues, a major reason that, after ending 2013 with a net loss of
$67.6 million, Cook County Health finished its most recent fiscal
year in the black.
Now, the provider, like other safety-net hospitals, has a new
challenge: holding onto old clients.
“For the first time in our history, we need to compete for our
patients,” said Shannon. "A world of improved access is also a world
of choice."
At Grady Health System in Atlanta, meanwhile, the number of patients
covered by insurance increased by less than 2 percent last year. Bad
debt from unpaid bills has continued to climb, to $396 million from
$269 million in 2013. And the percentage of patients covered by
Medicaid didn’t change.
“We’ve seen no difference from the Affordable Care Act,” said John
Haupert, Grady's chief executive. Many patients "are still coming to
us as a safety-net provider and falling under our charity care.”
Georgia is one of 20 states, disproportionately clustered in the
South, that didn’t expand Medicaid. About 89 percent of those left
out of the new Medicaid coverage, because their states chose not to
expand the program, live in the South, Kaiser Family Foundation
found.
Grady has a better financial outlook than many hospitals in states
that didn't expand Medicaid, thanks to a philanthropic campaign that
has raised $350 million since 2008 to fund new infrastructure and
expand clinical services. But, unlike Cook County, which has reduced
some dependence on local government support with the help of
Medicaid expansion dollars, Grady remains reliant on $57 million in
tax support from two local counties. Without the local funding,
Grady would be running a deficit.
“From a global perspective, it seems like the ACA is working,” said
Kevin Holloran, senior director at Standard & Poor’s. But in
non-expansion states, like Georgia, “it’s really a neutral. It’s
just the status quo.”
(Reporting By Robin Respaut; Editing by Peter Henderson and Sue
Horton)
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