Talking Politics: Federal Funding Cuts Could Hurt Missouri Hospitals

Oct 4, 2017

  Congress missed the deadline to delay federal funding cuts to hospitals last week. Without a solution, many Missouri hospitals could be hit hard.

The Disproportionate Share Hospital Program, also known as “DSH,” is a federal funding program that helps offset the costs for hospitals that serve uninsured patients.

When the Affordable Care Act was passed in 2010, DSH payments were scheduled to go down because fewer people would be uninsured. But the Supreme Court ruled that states weren’t obligated to expand Medicaid under the ACA. 19 states, including Missouri, opted not to expand coverage. That meant, DSH payments to cover uninsured patients were still crucial for hospitals in those 19 states.

So, Congress delayed the implementation of the DSH cuts for the last few years. This year however, Congress didn’t pass legislation to continue delaying the cuts.

I spoke with Dave Dillon with the Missouri Hospital Association and Tim Wolters with Citizens Memorial Hospital in Bolivar, Missouri, about what these cuts means for the state.

 

Interviews have been condensed and edited for content and clarity.

Do you have any insight as to why the deadline wasn't met?

Dave Dillon: I think that this issue was caught in the greater discussion among Congress about what the Affordable Care Act was going to look like or if there was going to be a full replacement for the Affordable Care Act.

The context of this is that in the original law, the DSH funds were cut from their current level by $18 billion. Each iteration of this has moved the beginning date of when these cuts would go into effect, but it also increased the amount that was going to be cut.

But there are about 300 thousand individuals who would qualify under the Affordable Care Act that don't have insurance now, that these funds help offset the loss of providing care to them when they seek it.

How would these cuts directly impact Missouri hospitals?

Dave Dillon: Beginning in 2019, we estimate that our total for federal funds lost for Missouri is actually $157 million. That number increases every year. By 2024 it's $419 million.

Hospitals will always have a federal requirement to treat and stabilize individuals who come in, but how far they can go beyond that to provide care, would be very much in question. Whether they can operate with the service lines that they currently have or extend ambulance services, those kinds of questions, those are all questions that without Medicaid we were already exploring as a hospital community.

Even without these payments, after DSH payments were made, hospitals in Missouri provided $1.2 billion of care they didn't get paid for. So, DSH does a good job to help reduce those costs, but even with these funds, hospitals provided $1.2 billion worth of care, and so this is a huge issue for hospitals.

Missouri has a lot of rural areas. How could these cuts affect hospitals in those communities?

Dave Dillon: Cuts to programs like this hurt rural hospitals because rural residents tend to be older, they tend to be sicker and much less likely to have commercial health insurance. So you may find that the population that gets care at rural hospitals that are on Medicare are fine, and are good payers for that hospital. But if you have fewer commercial insurance payments, you have fewer payers that are probably paying the actual cost of care. Then Medicaid is generally more likely in rural populations. But Medicaid in Missouri is very, very low when it comes to eligibility rates, which wouldn't be the case if we expanded.

Could you explain what these cuts would mean for Citizens Memorial Hospital?

Tim Wolters: We just have to kind of try and decide what programs we can fund. But we provide a lot of services to the community, to the area that don't pay for themselves. We offer ambulance services in four counties. We have a number of walk-in clinics, which are heavily used by uninsured patients who don't have a regular primary care provider. So they use the walk-in clinic where they don't have to schedule in advance. But we have staff available 12 hours a day, seven days a week in most of those clinics. So generally the revenues we get don't cover the cost of those services.

It's programs like that that are a great service to offer to the community, but at some point we have to try and make sure we have the resources to continue to provide those services.

What do cuts like these mean specifically for rural communities?

Tim Wolters: Seventy-five percent of our patients either are on Medicare, Medicaid, or they're uninsured. In rural areas, that tends to be a higher percentage than in urban areas—particularly the Medicare. The Medicare population is generally much higher in rural areas. So all those—whether it's paid by the government or uninsured patients that don't pay—we're not making money on those patients.

Can you explain why these kinds of services are important for your community?

Tim Wolters: Well, particularly in rural areas because we have such distances to drive having a walk-in clinic available may help someone who is trying to hold down a job and they can wait until the evening to come take care of an issue with their child or something like that. So, it's a great service to have available so patients can get better access to care.

One of the biggest issues with health care is a lot of the time people delay getting care. So then by the time something becomes serious enough that they need to address it, that's when they're calling the ambulance and having to go to the emergency room, and the care is much more expensive at that point than if they had come in early and addressed something while it was still manageable. So that's why we try to encourage patients to seek out care when they're getting sick, and don't wait until it gets too severe.