Should Hospitals Support Medicaid Expansion? Saint Joseph Mercy CEO Garry Faja Responds

As of June, 26 governors, mostly Democrats, have actively supported expanding Medicaid under the Patient Protection and Affordable Care Act. Another 13, all Republicans, have insisted they will not participate in the Medicaid expansion.

These state-level decisions on Medicaid could have huge ramifications for hospitals, especially safety-net providers who care for many low-income patients. When the PPACA was first drafted, the Medicaid expansion was seen as essential for hospitals. Disproportionate share hospital payments are being phased out, but more paying Medicaid patients would hypothetically offset some of those DSH losses.

However, last year, the Supreme Court ruled that the Medicaid expansion could not be mandated and instead is optional on a state-by-state basis. This has led to 50 separate conversations and debates on how states should handle the nation's health program for the poor.

Here, Garry Faja, president and CEO of Saint Joseph Mercy Health System in Ann Arbor, Mich., part of Livonia, Mich.-based CHE Trinity Health, shares his take on Medicaid expansion. Currently, Michigan Gov. Rick Snyder, a Republican, wants to expand Medicaid and is touring the state to make his case for it. However, the state's Republican-led Senate has been vehemently opposed and did not vote on the measure before their summer recess.

GarryFajaGarry Faja. President and CEO of Saint Joseph Mercy Health System in Ann Arbor, Mich.: We support Gov. [Rick] Snyder's Healthy Michigan Plan that strives to improve and strengthen our state's Medicaid program and offer health insurance to low-income working adults.  

Failing to accept federal support to provide health insurance to an estimated 450,000 working Michigan adults — including many veterans — will have serious consequences to our local economy. Michigan will forgo about $2.1 billion in economic activity and an estimated 18,000 new jobs generated by the additional federal dollars coming into the state's healthcare system.

Business leaders across Michigan — including the Michigan Chamber of Commerce, Small Business Association of Michigan and the Detroit Regional Chamber — are quick to point out that Medicaid reform can help slow the increase in health insurance premiums paid by Michigan employers by reducing the burden of uncompensated care currently borne by Michigan hospitals. According to some estimates, this cost-shift has imposed a hidden tax of about $1,000 per family through higher health insurance premiums.

Our hospitals and clinical staff have a long history of treating the uninsured and underinsured in southeast Michigan. While not the easy thing to do, it is the right thing to do. But we cannot solve the problems of the uninsured and underinsured on our own. Legislators have a unique opportunity to provide additional access to healthcare services for these vulnerable populations, relieve our businesses of some of the burden of cost-shifting, create new jobs and save our state precious tax dollars.

To those who argue we cannot afford to support Gov. Snyder's plan, we say: We cannot afford not to support the Healthy Michigan Plan.

What are your thoughts? Should hospitals support state Medicaid expansions? What other issues need to be addressed with Medicaid reimbursements today? Email Bob Herman at to share your comments.

More Articles on Hospitals and Medicaid:
Arizona Expands Medicaid
The Rigors of Today's Healthcare Finances: Q&A With Hendrick Health System CFO Stephen Kimmel
The Medicaid Expansion: Opportunities and Challenges for Hospitals

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