Why we should advocate for funding our public hospitals
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Close to 20 million Americans have gained health insurance since the Affordable Care Act (ACA) — also known as Obamacare — was implemented, resulting in about 90 percent of the population now being covered. That’s no small achievement for a country that still hasn’t fully embraced the notion that healthcare is a right of citizenship.

With the law’s success, you’d think the nation’s public hospitals would finally have a chance to come out from under the decades-long charity care burden they have been carrying for the $3 trillion-a-year U.S. healthcare system.

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But think again.

Public hospitals are almost always the last to benefit from fundamental changes in health policy like Medicare in 1965 and Obamacare in 2010 — politically hard-fought laws that were designed to make the system more affordable and fair.

Their for-profit and nonprofit competitors are often first to capture many of the newly insured patients because of the bargaining power these hospitals already have with insurance companies. At best, the local public hospital may get a small piece of the larger health insurance pie available in the community. But many are forced to become more creative in finding ways to care for patients who continue to fall through a healthcare safety net that remains full of holes.

It’s no different this time.

There are about 30 million people in the U.S. who aren’t getting any of the ACA’s benefits, through provisions of the law itself or because states where they live claim they can’t afford to cover them. This huge gap forces public hospitals to plead for renewed support from local officials who wrongly assume that since healthcare reforms like Medicare and the ACA are federal laws, Washington should deal with it.

That’s why history is important. America’s public hospitals are the creation of local governments, many chartered over a century ago with a mission to care for indigent patients in return for some level of support from local taxes. Unlike their competitors, most have never been able to survive on the basis of the revenue they get just from Medicare or private insurance.

It’s even harder now for many of them, especially in the South where Republican governors and Republican-controlled legislatures have steadfastly refused to expand Medicaid enrollment to millions of low-income working Americans, as the ACA envisioned.

Texas, Florida and Georgia, the three largest states in the region, now have the highest rates of uninsured residents in the country. Think about how that impacts the financial security of large, iconic institutions like Parkland Memorial Hospital in Dallas, Jackson Memorial in Miami and Grady Memorial in Atlanta — or, for that matter, any of the other safety net hospitals in those states. 

Moreover, the ACA specifically forbids non-residents of the U.S. — legally here or not — from signing up for the insurance exchanges. That leaves public hospitals in southern cities that rely heavily on immigrant labor to care for them when they are sick or injured. 

On top of that Medicaid reimbursement rates — set by the states— are notoriously stingy in the South. In some large public hospitals the Medicaid caseload, combined with those who have no insurance whatsoever, account for over half of all admissions.

That’s a toxic business model, coming at a time when these same hospitals are carrying the load for many costly, essential services that their community competitors are not interested in providing to the uninsured. These include emergency psychiatric care, kidney dialysis, ongoing treatment for patients with HIV/AIDS, the highest-level neonatal care, burn care, and, of course, trauma – a signature service of many public hospitals.

In recent years most local tax revenue to public hospitals has come in the form of bond issues for new construction or improvements — not operating funds to help pay for those essential services. A few, like Grady in Atlanta, have actually seen a substantial reduction in operating support from their local governments over the last two decades.

In policy discussions we often fail to recognize that many of our public hospitals cannot thrive in a system that is so dependent on marketplace-based solutions. They are unique in their individual markets. They provide services that the local market cannot and will not otherwise provide.

More than any other reason, this is why they need a consistent level of public support at the federal, state and local level.

Mike King is an Atlanta-based health policy journalist and the author of the recently released “A Spirit of Charity: Restoring the Bond between America and Its Public Hospitals.”