Kansas hospitals could be hit hard by GOP health plan

Cuts to Medicaid and other changes under the Senate health bill would put added pressure on already struggling hospitals, hospital advocates in Kansas say.

“Hospitals will have to make decisions, really conflicting decisions, between what is morally the right thing to do and what is financially sustainable,” said Ben Anderson, CEO of Kearny County Hospital. “They’re going to have to choose between providing some essential services for the benefit of the public and remaining open.”

Both the House and Senate versions of the bill repealing the Affordable Care Act would reduce federal money for Medicaid, also imposing per capita caps based on the number of people in Medicaid programs or block grants.

States like Kansas that did not expand Medicaid will no longer have the opportunity to do so.

By 2025, Kansas will have foregone $21.4 billion in net federal outlays for Medicaid compared with states that did expand, according to the Kansas Hospital Association, a nonprofit that includes 212 member facilities, 127 of which are full-service community hospitals.

“What that means is a continuation and maybe an exacerbation of things you’ve already seen,” said Tom Bell, president and CEO of the Kansas Hospital Association. “What kind of services can we continue to offer? Do we have to look at the level of staffing that we have in terms of employees in the hospital? Are we going to have to look at layoffs?”

U.S. Sen. Jerry Moran said in a statement Tuesday that he opposed the Senate bill.

“The Senate healthcare bill missed the mark for Kansans and therefore did not have my support,” he said after Senate Republican leaders said a vote on the bill would be delayed until after the July 4 recess.

U.S. Sen. Pat Roberts said in a statement Tuesday that “Kansas fared well under this draft,” although he was “open to further improvements in the bill.”

“For the first time, tens of thousands of low-income Kansans would be eligible to receive tax credits to purchase insurance, lowering the cost of and improving access to care,” Roberts said. “The draft protects provisions popular among Kansans including allowances for pre-existing conditions, allowing young people to remain on their parents’ plans and bans on lifetime limits important to the chronically ill. This bill stabilizes the individual insurance market making private insurers more able to step in and pay for care instead of Medicaid.”

State’s responsibility

Cutting funding for Medicaid will pass the responsibility of financing to the states, said Robert St. Peter, president and CEO of the Kansas Health Institute.

That will leave states, including Kansas, making decisions about who is eligible, what is covered and how much providers are paid.

“No matter which bill or which part of the two bills are enacted into law, there are still more major changes in the healthcare scene awaiting us both on the private insurance side and the Medicaid side,” St. Peter said. “I think that states are going to be given more flexibility and more responsibility for making these kinds of decisions.”

In Kansas, 387,934 people were enrolled in Medicaid and the related Children’s Health Insurance Program in April. More than half of the people enrolled in Medicaid are children.

The Commonwealth Fund reported that the American Health Care Act, the House bill, could cause a 12 percent increase in uncompensated care from 2017-2026 for Kansas acute care hospitals.

Anderson’s hospital in Kearny County is a 25-bed critical access hospital in a community of 2,200. It also has three outpatient clinics and 70 adult care beds, including assisted living and long-term care.

Without coverage for everyone, more uninsured people will receive health care through the high-cost emergency room, Anderson said. That will cause hospitals to raise costs for the privately insured to offset losses from the uninsured who have used the emergency room and are unable to pay their bills.

“Health is a public asset, because disease does not discriminate based on socioeconomic class or the type of insurance you have,” Anderson said. “If one part of our population falls ill due to declining healthcare coverage or healthcare delivery access, it affects everyone.”

Rural health care

The nonpartisan Kaiser Family Foundation warned in an April brief that Medicaid reductions “could disproportionately affect individuals living in rural America.” Under both health care bills, states would likely have to increase spending to maintain coverage or would have to reduce eligibility, benefits or provider payments, the brief stated.

About 46 percent of Kansas’ nonelderly population lives in rural areas, according to Kaiser.

Roberts said in a statement last week that he would “see that rural healthcare is protected.”

Rural hospitals are at greater risk since they operate closer to the financial edge, said Sheldon Weisgrau, director of the Health Reform Resource Project in Topeka.

“This unfortunately I think is going to lead to hospital closures,” Weisgrau said. “It’s going to lead to communities deciding whether to cut services or lay people off.”

A third of Kansas’ rural hospitals were already at risk of closure, according to a study by iVantage Health Analytics released in 2016.

The Commonwealth Fund reported that the House bill would reduce operating margins by 10.5 percent for rural acute care hospitals in Kansas.

At a conceptual level, many people agree with the idea of states determining for themselves how to run Medicaid, said Bell of the Kansas Hospital Association.

“The problem comes when you use that concept as a way to cut the amount of money in the program,” Bell said. “When you do that, it again makes it really difficult for states to continue those same levels of service that they’ve provided.”

This story was originally published June 27, 2017 at 12:21 PM with the headline "Kansas hospitals could be hit hard by GOP health plan."