How Should Georgia Pay for Indigent Healthcare?

The New York Times on Saturday published a page A-1 story about how uninsured Georgians will have more difficulty getting healthcare after the Affordable Care Act (AKA Obamacare) kicks in in January. The article specifically focuses on two of the state’s largest safety net hospitals: Grady in Atlanta and Memorial Health in Savannah.

The issue arises because the authors of Obamacare assumed that most of the poor uninsured would receive treatment after they became eligible for an expanded Medicaid program. To help pay for that, they reduced funding for the Disproportionate Share Hospital Fund (DSH), which provides grants to states that are used to help hospitals that treat large numbers of indigent patients. Grady alone is expected to lose about $50 million in annual payments from the fund.

Following the Supreme Court decision that states could not be forced to expand Medicaid as contemplated in the ACA, Governor Deal announced Georgia would opt out, claiming the expansion would cost the state between $2.5 and $4.5 billion–money it doesn’t have. Without the additional revenue from treating the additional Medicaid patients, and facing the loss of most DSH funds, the hospitals are left with nowhere to go.

What are the state’s options? One, obviously, would be to expand Medicaid to cover more uninsured. The Georgia Hospital Association is already pressuring the Governor to reverse his decision. But, expanding Medicaid, while providing some relief to hospitals, isn’t the same thing as restoring the funding provided by the DSH program. And given the dislike of Obamacare by the GOP base the governor hopes will support him in a three-way primary next May, he may not want to choose that route.

Another option would be to get Congress to delay the cuts to the DSH program, thereby keeping things the way they are now, at least for a while. Rep. John Lewis of Atlanta introduced a bill in the U.S. House in May that would do that, and Sen. Roger Wicker (R-Miss.) introduced a similar bill in October. Lewis’s bill is cosponsored by all the Democrats in the Georgia delegation, however none of the Georgia Republicans have signed on. The prognosis for the bill’s passage, according to govtrack.us, is slim to none.

A third option would be for the Georgia Legislature to replace the DSH reimbursements with state funding. But money is tight, and it’s unclear what would be cut to pay for it. After voters soundly rejected a 2010 plan to charge a $10 annual car tax that would have raised $80 million annually to pay for trauma centers, and after the governor last year had to finesse an extension of the hospital bed tax that helps pay for some Medicare coverage, it’s unclear whether the legislature will have any interest in fixing the problem. This is especially true in an election year session that is likely to go by quickly.

And of course, there’s the ‘do nothing’ option, leaving hospitals to try to solve the problem on their own. Three rural Georgia hospitals have already closed down because they don’t see a way to make it financially. And as Jim Galloway notes in his weekend column, the state’s Democrats, especially gubernatorial hopeful Jason Carter, are prepared to make political hay over any hospital closings or cuts in services.

There may be yet another way to solve this problem that I haven’t thought of. (Ideas and suggestions are welcome in the comments.) But, this issue isn’t going to go away quietly, and I suspect you’ll be hearing a lot more about it over the next year.

24 comments

  1. griftdrift says:

    “But, expanding Medicaid, while providing some relief to hospitals, isn’t the same thing as restoring the funding provided by the DSH program.”

    Why not?

    • Jon Richards says:

      As I understand it, DSH is a formula grant given to the states to allocate as they see fit to hospitals with many uninsured patients. So, the state has some discretion in determining where they money goes. Medicaid, on the other hand, follows the recipient, so there’s no guarantee that a given hospital will end up with the same money they would have gotten under DSH.

  2. seenbetrdayz says:

    Or perhaps, how can the lives of indigent persons be improved to the point where they could afford their own healthcare?

    But no one ever asks the hard questions. I think we have to start thinking beyond temporary fixes. Lets say we were to drop $100 million dollars on Grady to make up for shortfalls. When that money is gone, you still have indigent patients and you’re now out a $100 million dollars.

    • John Konop says:

      I agree it is a combination of jobs that pay above poverty line and lowering the cost. You realize jobs below the poverty line we tax payers pay for it one way or another……which is why the CEO of Costco supports the Henry Ford model pay workers enough to afford what they produce…..ie raise minimum wage above poverty level. Same concept behind illegal immigrants that work for peanuts….we are saving any money by tax payers subsidizing the workers…..

      Second we could lower cost overnight, by providing a toll free diagnosis line for non emergency care like Kaiser does for people in their program……Thirdly, we should allow the state to use VA pricing on drugs once again a savings of up to 60%. Finally we need to coordinate vo tech training in high schools so non 4 year college based graduates are work ready graduates….

      • seenbetrdayz says:

        However, doesn’t raising the minimum wage also raise the cost of goods/services? Perhaps we could absorb the cost but the real problem is inflation. Few people ask why $7.25/hr doesn’t buy what it used to—all they know is that they now need $8.25/hr to cover what used to be affordable on $7.25/hr. We’re basically running a rat-race trying to make sure minimum wage keeps up with inflationary pressure. Increase minimum wage and they’ll simply ‘move the goalposts’, so to speak.

        • John Konop says:

          The effect on products would be few cents on a dollar…..cheaper than entitlements, welfare……Also higher wages more spending more jobs……the real indicator is real wages not inflation ie net buying power….

  3. Three Jack says:

    Simple, stop paying for it. If one needs a doctor, then one should have the wherewithall to pay for it without ripping off multiple taxpayers on the way to the doctor’s office.

    • Scott65 says:

      Yeah, until some poor person who cleans your house comes dome with some antibiotic resistant disease, or is exposed to TB and because they cant afford care spread it all over creation…disease knows no social boundary, remember that.

      • John Konop says:

        Doc,

        That is the catch 22……someone has to pay……and it seems nobody wants to pay, give away a subsidy, cut in pay, less money for drugs, less money for medical equipment…….obviously we do not want people dying on the streets…..but it is the inability for all sides to rationally work together. The cost cutting is simple…..the lobbyist are another story….

        For Example:

        Drug companies do not want VA pricing for drugs for the rest of us

        Doctors do not want nurse practitioners

        Dial a doc lowers revenue

        Lawyers want lawsuits

        Specialist want to do procedures over non invasive treatment

        Insurance companies do not want to pay claims

        Insurance company do not want to insure people with potential problems that cost real money

        People want Medicare to keep 2/3 the cost

        I am sure you get it……this is a not a consumer friendly model…..which is why we pay twice as much and get less many times…while all sides point fingers…..

  4. saltycracker says:

    There is a level of civilized society we must care for and all are due emergency stabilization. The problem is we cannot agree on the many variances of hard choices. Health providers should have the right of refusal beyond stabilization.

    We could consider grants to charity hospitals, mental institutions and orphanages.

    Failing that the next level is everyone having private insurance in a highly competitive environment, even if mostly subsidized for the poor.

    Government will trend to a the most inclusive socialized system and fail to enforce what they have agreed to, resulting in a bankrupt system. There is no level that health providers will be satisfied with. Wait until Obamacare slaps controls on prices and payrolls to stay solvent.

      • Jon Richards says:

        George, surely you remember the parable of cheap, fast and good. You can have two of the three but not all three. And maybe only one. The political response has been price controls on providers. That tends to reduce the supply of healthcare providers willing to treat people. Is that the right response?

        • George Chidi says:

          Well, we don’t have cheap right now. An angiogram costs $35 in Canada. In South Africa, it’s $235. It’s about a grand here. A routine doctor’s visit is about $100 out of pocket for most folks here — four times the international average. A routine birth is $10,000, several times the cost in most places. The median cost of one day of hospitalization in the U.S. is about $4300. In most Western countries it’s under $1000. On and on.

          I’d consider that argument if the numbers were closer, but we spend about twice the OECD average on health costs in the U.S., and our health outcomes are worse in terms of disease, lifespan and access to care.

          Precisely how much “good” do we have to give up to cut those prices? A fair question. But I bet it’s worth it.

          • saltycracker says:

            Are those the numbers being billed or those the insurance companies are paying ? When I look at my insurance claims, the spread is stunning.

            To settle a trust issue: with the state/fed Medicaid 10/90 proposal would the states go for a reverse offer – the Feds take it over and the states send in 10% of a federal program ?

  5. Scott65 says:

    So, instead of taking a 3 year funded at 100% and 90% thereafter program. We will continue to sign up those that qualify for the old program at 60% funding…makes perfect sense dont you think? Its stupid on so many levels as to be a big joke…you know when republicans tout the wonderful things happening on the state level with republicans, you hear Suzanna Martinez, Scott Walker, Chris Christey…not much mention of Nathan Deal…must be a reason dont ya think

    • Mid Georgia Retiree says:

      I don’t have any faith whatsoever that the federal government will keep its word about the 90% funding after three years. And I really don’t think anyone else does either. After all, “if you like your health plan, you can keep it…..period!”

  6. seekingtounderstand says:

    Your asking the wrong question “How to pay for indigent Care?” Try asking how we have wasted our limited resources on things that are not as important? The following is just a start of tax dollars that could have gone to help out Grady.

    The never ending revenue stream from the hotel tax that was given to the falcons would have helped pay for some care at Grady…………….
    The cost of the new Atlanta street car would have helped fund Grady for a time.
    Tax credits to the movie makers who have been known to promote the south as “bad”.
    We could go on and on all day…………………………….
    If you asked voters if they would choose to spend it on those items listed above and other expenditures vs. helping out those in need, we all know how the vote would go.

  7. Tina Trent says:

    Seeking — I agree with you that these expenditures are just sleazy corporate welfare. But the money you’re talking about would do nothing to address the wild cost overruns blighting Grady and the entire indigent care system.

    The real problem is that entire generations of people use public benefits as their first and only choice. This decision lies at the heart of all subsequent crises. Obamacare just formalizes the income transfers already taking place. It’s essentially single payer with BCBS/United and other big insurers slotting in an extra layer of cost to the people already hardest hit — those making more than 60K and less than enough to earn beyond the 12.9% SS ceiling (105K this year?).

    Regarding indigent and elderly care, even if we raised minimum wages, it would have little effect, because the choices made once the main choice is to live off the rest of us dwarf a small per hour wage increase. The real problem, frankly, involves four groups of people draining the system: illegal immigrants and others who use their transience to avoid culpability for bills; single or allegedly single mom families expecting cradle-to-grave assistance; the “new disabled” screeching about mild or nonexistent mental or educational deficits like PTSD to plug the hole welfare reform cut in mommy’s budget; and elderly people on medicare who over-use the system while yammering that “they paid for it” — while in reality they did not.

    Ironically, these exploiters span the political spectrum. And while some are sympathetic in certain ways, all ought to be part of a hard conversation no politician has the chutzpah to start. So leftists look the other way while Cobb Cty grandma on medicare goes to five unnecessary specialists because she’s lonely (and doesn’t even question the soft fraud billings ’cause “she paid for it”). And RINOS don’t try to implement real welfare reform that would make fathers responsible for their offspring, rather than saddling taxpayers, because that’s their give for lefties staying quiet about Cobb County grandma (of course there’s lots of grandmas in Atlanta, too). And nobody wants a piece of the crazy that comes out when you question whether half the kids in special ed and on disability really need all those services or any services at all — while the really disabled and chronically ill go to the back of the line.

    It is a really long, deep, inefficient trough that spans both political parties, the insurance industry, and all the preening pseudo-nonprofit academic/medical taxdollar gobblers who couldn’t shriek about their civic good works while speeding in their BMWs if they didn’t have the permanent underclass to wave around like a big pirate flag.

    So, those of us working our butts off while losing our healthcare in 2015 — like me — are about to show the politicians what happens to the economy when it really becomes too illogical not to walk away from work rather than try to keep shoveling grain for lazy and crazy people all day with both parties lining up to kick you in the ass.

    It’s going to be interesting.

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