ACA repeal: Hospitals brace for impact

President Donald Trump and the Republican-controlled House and Senate have made it a priority to repeal or replace the Patient Protection and Affordable Care Act, or Obamacare, which could have far-reaching impacts for patients and health-care systems across Colorado, particularly those in rural areas.

The ACA was signed into law by President Barack Obama in March 2010, as a way to get 37 million uninsured people the health insurance they desperately need. As of 2016, only 20 million people had signed up for the health-care exchanges. A repeal of the ACA, with no replacement, would kick millions of people off their insurance and potentially force the closure of smaller, more rural health installations that rely on ACA funding to survive.

“There’s no question that we’ve already seen and will continue to see the impact of the ACA. Whether it is repealed or replaced or revised, we will continue to see an emphasis on demonstrating better value in health care and better outcomes. And more and more hospitals are going to be the place to go if everything else has failed,” said Robert Vissers, CEO of Boulder Community Health, one of only two independent hospitals along the Front Range of Colorado.

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Trump, in his first action as President on Jan. 20, 2017, issued an executive order seeking “the prompt repeal of the Patient Protection and Affordable Care Act, as amended. In the meantime, pending such repeal, it is imperative for the executive branch to ensure that the law is being efficiently implemented, take all actions consistent with law to minimize the unwarranted economic and regulatory burdens of the Act, and prepare to afford the States more flexibility and control to create a more free and open health care market.”

It isn’t clear what direction Congress will take in either fixing or replacing the law. The national news media has reported that there have been many disagreements between Republican legislators on how they should go about gutting Obamacare, or even if they should.

“The ACA is incredibly complex with many different parts to it,” Vissers said. “It has been phased in over time. There is a lot of interdependency of elements within the ACA. I think we can look back and certainly say that as a state and also through our local experience, that more people are insured. There are a lot less people uninsured and overall it has had a positive effect on the health of our community.”

He added that, “we have half as many uninsured patients than the start of the ACA. That has been the state experience as well. A complete repeal of it would absolutely lead to millions of patients nationwide losing health insurance. That’s an important impact and shouldn’t be lost in this.”

Health care is one of the most regulated industries in the country, Vissers said.

“A significant part of health-care costs is meeting all the different mandates and regulatory requirements,” he added. Many mandates and guidelines come from well-meaning people but are not well thought out.

Vissers pointed out that the “absence of a replacement plan shows it is incredibly difficult and complex. I hope what we get is better or an improved version. Many of the tenets of the original ACA were part of and came from the Republican party itself. I hope they recognize there is some significant value within that act, but obviously there is an opportunity for improvement as well.”

Colorado’s health-care industry is not panicking yet because of the uncertainty of what will replace the ACA. That’s because the industry has had to deal with a lot of change over the past five to 10 years.

“I would say that probably the biggest thing it has brought to the marketplace is significant uncertainty, at least in most systems, especially nationally. There’s a scaling back and there’s hesitation towards any significant capital investment until people see how this plays out. That also has a significant economic impact,” Vissers said.

Several hospitals that are part of the Colorado Hospital Association have said they will put the brakes on expansion and some building projects until they see how this plays out. The projects that are still under way, such as the UCHealth Longs Peak Hospital project in Longmont, are still moving forward full steam.

“We are building a fairly large expansion on our campus that we hope to begin in the next month, and we plan on continuing with that project. For me, it’s an example of the decisions we were able to make because we are an independent community hospital system,” Vissers said.

Banner Health, which operates hospitals in Greeley, Fort Collins and Loveland, said in a written statement, that “irrespective of changes in our nation’s health-care system, Banner Health’s focus remains on serving people in our communities who turn to us for care and wellness.”

Chris Tholen, vice president, financial policy and chief financial officer of the Colorado Hospital Association, said he has been watching very carefully what is happening at the federal level for Medicaid.

“We don’t think it is likely or at all reasonable that the ACA will be repealed without any sort of replacement or adjustment to it. There’s not a lot of reason to discuss repeal without replace. We don’t think it will happen,” Tholen said.

He added that what he is hearing is that portions of the legislation would be repealed but some parts would remain that everybody would agree has been beneficial to the United States. and health care, such as allowing people with pre-existing conditions to get health insurance and allowing children to remain on their parents’ health insurance until they turn 26.

Rather than repeal the ACA, Tholen believes the federal government will change how Medicaid funding is handled, either through block grants or per capita financing.

“Currently, federal Medicaid financing to the state is done on a match rate. For example, every dollar the state of Colorado puts up, the federal government matches with another dollar,” he said. “Then it is funded with $2.”

The federal government is looking at possibly changing that funding formula to a block grant system in which a set amount of money is given to the state and the state has the flexibility to determine how it will provide these benefits and administer the program.

The benefit to the federal government is that “it is more predictable from a budgetary standpoint. Over time, it would likely lower funding to the states,” Tholen said.

The Colorado Hospital Association is speaking with Colorado’s legislators, watching the media and working with the American Hospital Association to determine what will happen next, not just with the ACA but with federal financing for Medicaid as well.

“Hospitals made decisions on how they deliver health care based on the ACA and federal law,” he added. What hospitals and insurance companies want is stability in the market so they can do long-range planning, make capital improvements and make sure they are treating the population that has coverage.

Because of the ACA, Colorado has seen hospital systems become a delivery system of complete health care.

“The ACA has helped many hospitals and communities that were struggling prior to it,” Tholen said.

In four to six weeks, “I think the health-care industry, the state of Colorado and everybody will have a more clear idea of what federal Medicaid contributions will look like,” he added.