Hospitals are in for some ‘soul searching’ as they decide how to grapple with the Medicaid cuts proposed by Republicans

Doctors performing surgery

At NewYork-Presbyterian Hospital — one of the country’s oldest — about 30% of patients are covered by Medicaid.

It means that lately, the hospital has been thinking hard about what a Republican plan to cut funding to the program — which provides healthcare coverage to poor Americans — would mean.

“We’re going to have to really do some soul-searching here,” said Dr. Laura Forese, chief operating officer, in an interview with Business Insider.

The cuts have become a flashpoint for the Better Care Reconciliation Act — a proposal by the Senate Republicans to replace the Affordable Care Act. For now, the Senate won’t vote on the bill because there isn’t enough support.

According to the Congressional Budget Office the bill means cuts to Medicaid would reach $US772 billion by 2026. That’s 26% less than what funding would be under the ACA.

Medicaid is a federal program that provides insurance primarily to pregnant women, single mothers, people with disabilities, and seniors with low incomes. It’s funded by the federal and state governments.

The large cuts mean hospitals will have to look for ways to be more cost-efficient without skimping on the quality of healthcare. It’s a challenge that could be magnified as about 22 million people lose insurance coverage — making them less likely to show up at the hospital until they are sicker, and taking care of them is more expensive.

Cutting costs and encouraging preventive care to keep people out of the hospital are strategies New York Presbyterian have been doing already. They’re using community outreach and having more “virtual” visits via telemedicine to make doctors more accessible.

But other hospitals, which rely more heavily on Medicaid payments, will need to take more drastic measures.

“I’m not sure how they absorb cuts like this,” Forese said of these safety-net hospitals.

Treating sicker patients later


Under the Affordable Care Act, the law better known as Obamacare, Medicaid was expanded to those earning 138% of the federal poverty limit in states choosing to participate.

Previously, the line was drawn at 100%. The BCRA phases out the Medicaid expansion over several years beginning in 2021, with the idea that those who fall out of Medicaid eligibility will access coverage through the individual insurance market.

The CBO also said that it does not expect many of those who fall out of Medicaid eligibility under the BCRA to purchase insurance “because of the expense for premiums and the high deductibles” for individual market plans.

For individuals who can no longer afford coverage, it could mean that the first time they encounter healthcare will be when they’re at their sickest, a point that’s much more expensive and harder to treat.

“We’ll have to provide more uncompensated care. Those patients are still going to get sick,” Dr. Ken Davis, CEO at Mount Sinai Health System told Axios. “The problem is, they may get sick and having had no preventive care, they may come to our hospital in a worse situation than they would have had they been receiving regular care.”

That’s going to put even more financial strain on hospitals, which, in the case of nonprofit hospitals like NewYork-Presbyterian, have a commitment to care for everyone who comes through the doors.

It could lead to a “vicious spiral down,” Forese said. “It’s unrealistic to think every hospital’s going to be able to afford magnitude of cuts.” That environment could leave little room for hospitals to update equipment, keep the employees they have, and generally keep up with the advancements in medicine.

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