Hospitals in states most vulnerable to Medicaid funding reductions are preparing for what some leaders describe as a financial reckoning. If federal proposals to roll back Medicaid expansion move forward, hospitals could see a $31.9 billion loss in revenue and $6.3 billion in additional uncompensated care, according to an analysis from the Urban Institute and the Robert Wood Johnson Foundation.
While hospital associations and health systems across the country are closely monitoring developments on Capitol Hill, many warn that a wait-and-see approach could leave organizations dangerously exposed to sudden fiscal shocks — especially in rural and underserved areas.
Hospital leaders in some of the most at-risk states for Medicaid reductions discuss contingency planning, the potential fallout for patients and the long-term implications for access to essential services in their communities:
Kyle Fisher, CFO, Community Health Network (Indianapolis): Community Health Network remains committed to its mission of enhancing health and well-being, even as we face potential Medicaid funding cuts. We proactively plan for a range of scenarios to ensure we maintain fiscal strength, including managing supply costs, reducing clinical variation and identifying cost efficiencies. We continuously evaluate how to best sustain essential services to meet the needs of our communities.
While our strength as a system has allowed us to support a broad array of services, severe reimbursement cuts could force us to reconsider how and where we deliver care. Despite these challenges, we remain dedicated to serving our communities with compassion and quality care.
Rich Rasmussen, President and CEO, Oklahoma Hospital Association: Our initial assessment is if we lost Medicaid expansion, our state’s hospitals could see a $2.4 billion annual reduction in revenues. Doing simple math, we could see a staffing reduction of 18,000 to 20,000 [Full-time equivalents]. Rural hospitals will most certainly close. This would be equal to a Base Realignment Closure (BRAC) on steroids.
Washington State Hospital Association: Legislative advocacy is the most important step hospital leaders can take right now. Medicaid is a safety net for the most vulnerable members of our community, and cuts are likely to lead to service reductions that impact all patients — not just patients who rely on Medicaid. Getting needed healthcare might require a longer wait time or require further travel. There are likely to be patients who are unable to overcome the barriers presented by these cuts. We and our members are sharing this information with members of our congressional delegation.
We are also encouraging hospital governing boards to begin having conversations about what services may need to close. With the potential cuts at the state and federal levels for hospitals in our state, services will be lost. We are urging board members and hospital leaders to start now so they can do closures in a planful way with time to consider options. Key questions to ask include: What is the financial impact of the service? Who else provides the service? Will you just be shifting costs to the ER? Our association recently held a governance education session about key considerations in closing a service line or a whole hospital, and it had the highest attendance ever of our governance education sessions.
Becky Hultberg, President and CEO, Hospital Association of Oregon: Oregon is vulnerable to Medicaid cuts, and the consequences could be devastating for patients and communities. The Medicaid cuts contemplated by Congress pose a significant threat to the ability of Oregonians to get the care they need, the financial stability of Oregon hospitals, and the state’s economy. Reductions in Medicaid could tip fragile hospitals over the edge, as current Medicaid payments to Oregon hospitals only cover about 50% of the cost of care. The scale of these cuts could force reductions in Oregon Health Plan coverage and limit benefits — impacts that would ripple across the entire healthcare system, affecting patients, their families and their communities.
