The American Hospital Association and the Federation of American Hospitals have released a set of studies outlining the possible effects if the Affordable Care Act is repealed without immediate replacement, and hospital officials conclude that their facilities would be hit, and hit hard, if this is indeed the case.
Allen Dobson, PhD, health economist and president of healthcare consulting firm Dobson/DaVanzo, said that if the ACA is not replaced -- or if a replacement fails to make up for the Medicare and Medicaid cuts that are embedded in the ACA -- then hospitals could see up to $165.8 billion in losses from 2018 to 2026.
Rolling back the ACA's coverage, which the Medicare and Medicaid cuts were intended to partially finance, would have a devastating effect on community hospitals in particular, said Chip Kahn, president and CEO of FAH.
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Kahn looked at an ACA repeal bill passed by Congress in 2015 through budget reconciliation, and vetoed by President Obama, which could well serve as a template for future attempts by Congress or the Trump administration to scale back or eliminate the law. He said if a similar measure was passed and then signed into law, it would double the financial hit incurred after the passage of a 1997 law that also sought to reform hospital payment.
"When the (1997) bill was passed, there was a presumption that Medicare Plus Choice, the provider sponsored organizations, the reforms in the bill, would make everything work better and that hospitals would be able to buffer the reduction," said Kahn. "It was very soon discovered that wasn't the case. The law was passed with the best of intentions, but Congress in its wisdom came back and realized it has made some mistakes (and) refunded the money from the hospital cuts because the hospital cuts were untenable."
At that time, he said, Congress had a budget surplus. That's clearly not the case this time around.
"It's kind of scary looking into the future here because we're in a different situation," said Kahn. "If lawmakers choose to unravel the ACA and replace it with something smaller, then it is essential that the funding for the ACA coverage be returned so .... we'll have the services (patients) need."
Echoing that assessment, Dobson pointed to the 2015 attempt at ACA dismantling as an example of what not to do.
"It repealed ACA policies without offering a replacement, but retained reductions in hospital payments," said Dobson. "It was asymmetrical. It took away from the hospitals, but but didn;t give back in order to have a level playing field."
The findings were consistent with a September report by the Congressional Budget Office which indicated 40 to 50 percent of hospitals would be underwater financially if such action was taken.
Joann Anderson, president and CEO of Southeastern Health in Lumberton, North Carolina, expressed trepidation over the legislative uncertainty plaguing the hospital industry.
"We've spent so much effort over the past six years trying to adapt to the ACA that another change is gut-wrenching," she said. "We need to know what the replacement is going to be. … We cannot take additional cuts."
Despite the warnings, Kahn was optimistic that lawmakers would be receptive to the industry's concerns.
"Whether it's Republicans or Democrats, they'll always have to come back to the hospitals to find out what they need. I'm not really that concerned. I think they'll take a realistic view."