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Safety Net CEO: AHCA Passage Rests on Backs of Poorest, Sickest

By Philip Betbeze  
   May 18, 2017

The CEO of Grady Health System says the bill's passage by the Senate would cut $50 to 60 million from the health system's annual revenues and many who gained insurance through Obamacare will lose it.

The recent passage by the U.S. House of Representatives of the American Health Care Act, will affect all hospitals to some degree, but none more than safety net hospitals, which treat a large percentage of poor patients.

Why? Because a much larger percentage of their revenue depends on reimbursement from Medicaid, which expanded under the ACA, but is targeted for the majority of cuts under the AHCA.

John Haupert is not just CEO of Grady Health System, the $917 million (operating revenue) Atlanta safety-net health system. He's also the board chair of America's Essential Hospitals, the 275-member safety net hospital association.

In the wake of the House's passage of the AHCA, and in anticipation of the Senate's upcoming consideration of the Republican bid for repeal and replacement of the Affordable Care Act, HealthLeaders spoke with Haupert about his thoughts on the bill (or its Senate version) and the effects it could have on hospitals and health systems like Grady.

Following is a lightly edited transcript of that conversation.

HealthLeaders: What would be the biggest negative impact from this bill if it's enacted in its current (House) form?

Haupert: For patients and hospitals the biggest hit is that they'll pull $880 billion out of Medicaid. To me that looks like a 25% reduction in what a hospital would receive for providing for Medicaid patients.

For Grady, that would mean that about $45 to $60 million a year would be cut from our share of Medicaid funding. Many patients would lose coverage and patients who maintained Medicaid coverage would experience limited or fewer services.

To be fair, this bill does away with a couple of other things that had been contentious in the ACA that many governments would like to implement, such as work requirements and/or participation costs.

This legislation does give states more latitude on requirements around seeking work or entering workforce training programs or to have patients participate in the cost. I'm not sure all of those are bad things.

Also, the legislation that brought us the ACA ramped down disproportionate share funding, and of course, safety net hospitals opposed that. This bill does away with those cuts, but follows that with cuts in the base Medicaid program that will be more than DSH cuts would have been.

Philip Betbeze is the senior leadership editor at HealthLeaders.

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