The Senate's proposed bill to replace Obamacare was immediately
met with widespread dissent from healthcare providers throughout the country,
including one of the largest for-profits, Tenet Healthcare Corp.
The uniform message may mobilize the industry to more vocally oppose a law that could significant affect the revenue of hospitals across the country.
Senate Republicans released a discussion draft Thursday morning of their proposed replacement of the Affordable Care Act. The bill would limit the law's financial assistance to families and individuals who couldn't afford healthcare, cap Medicaid spending, roll back the Medicaid expansion and potentially eliminate coverage for millions of Americans.
Hospital executives said the proposed Senate bill, which was crafted behind closed doors, could put them in a financial bind as charity and uncompensated care balloons.
Dallas-based Tenet Healthcare sent out a systemwide email Thursday, obtained by Politico, to its 130,000 employees across 47 states urging them to push back against the proposed healthcare bill.
"We are asking all Tenet colleagues to … support the grassroots campaign by calling your U.S. senators to oppose any legislation that would result in millions of people losing their healthcare coverage," Tenet's Dan Waldmann wrote in an email to staff.
The criticism surprised some based on Tenet Chairman and CEO Trevor Fetter's presentation at the J.P. Morgan Healthcare Conference in January where he outlined the financial consequences of the ACA. Tenet realized about $230 million in benefits since the law's implementation in 2010 while its Medicare cuts cost the system an estimated $350 million, resulting in a $120 million loss, Fetter said.
"Providers are understandably concerned about decreases in funding or coverage," healthcare industry consultant Rita Numerof said in a statement. "They'll see top- and bottom-line pressure from reduced reimbursement and a reduction in covered lives."
Financial analysts agree.
"Under the proposed Senate bill, both for-profit and not-for-profit hospitals would face weaker demand for services and higher rates of uncompensated care expense, with the most significant impact on the sector occurring after 2020 when the changes to federal Medicaid funding are phased in," said Daniel Steingart, a vice president at Moody's. "Transitioning federal Medicaid payments to a per-capita, or block grant system, and freezing Medicaid expansion would reduce the number of people with insurance and increase hospitals' exposure to bad debt and uncompensated care costs."
The proposed Senate bill would leave states to fill the gap or end coverage as the enhanced federal payments for Medicaid expansion implemented under the ACA would be phased out over seven years. The Congressional Budget Office estimated that the House version of the bill would leave 23 million individuals uninsured.
"It is critical that Congress preserve coverage for the more than 15 million newly enrolled people who have received health coverage in recent years and also preserve the option for states that have not expanded Medicaid to increase coverage," Anthony Tersigni, president and CEO of St. Louis-based Ascension Health, wrote in an op-ed for Modern Healthcare. "Congress should take steps to preserve the safety net instead of enacting Medicaid cuts that will do serious harm to healthcare access for the vulnerable."
The Senate bill, known as the Better Care Reconciliation Act of 2017, could cap the growth of federal Medicaid payments at the medical inflation rate—estimated to be 5.6% annually—starting in 2020. Come 2025, the growth of those payments would be limited to the Consumer Price Index rate, which has averaged around 1.4% since the Great Recession.
Curtailing Medicaid would lead to a "terrible and distracting" debate on how states should fund healthcare coverage, said Dr. Bruce Siegel, president and CEO of America's Essential Hospitals.
"Today's Senate bill makes few material improvements to the deeply damaging House legislation and might be worse overall," he said. "For the hospitals that protect millions of Americans and their communities—our essential hospitals—this bill might even accelerate decisions by some to reduce services or close their doors."
If the Senate passes the bill, it would have to get through the House for approval.
The uniform message may mobilize the industry to more vocally oppose a law that could significant affect the revenue of hospitals across the country.
Senate Republicans released a discussion draft Thursday morning of their proposed replacement of the Affordable Care Act. The bill would limit the law's financial assistance to families and individuals who couldn't afford healthcare, cap Medicaid spending, roll back the Medicaid expansion and potentially eliminate coverage for millions of Americans.
Hospital executives said the proposed Senate bill, which was crafted behind closed doors, could put them in a financial bind as charity and uncompensated care balloons.
Dallas-based Tenet Healthcare sent out a systemwide email Thursday, obtained by Politico, to its 130,000 employees across 47 states urging them to push back against the proposed healthcare bill.
"We are asking all Tenet colleagues to … support the grassroots campaign by calling your U.S. senators to oppose any legislation that would result in millions of people losing their healthcare coverage," Tenet's Dan Waldmann wrote in an email to staff.
The criticism surprised some based on Tenet Chairman and CEO Trevor Fetter's presentation at the J.P. Morgan Healthcare Conference in January where he outlined the financial consequences of the ACA. Tenet realized about $230 million in benefits since the law's implementation in 2010 while its Medicare cuts cost the system an estimated $350 million, resulting in a $120 million loss, Fetter said.
"Providers are understandably concerned about decreases in funding or coverage," healthcare industry consultant Rita Numerof said in a statement. "They'll see top- and bottom-line pressure from reduced reimbursement and a reduction in covered lives."
Financial analysts agree.
"Under the proposed Senate bill, both for-profit and not-for-profit hospitals would face weaker demand for services and higher rates of uncompensated care expense, with the most significant impact on the sector occurring after 2020 when the changes to federal Medicaid funding are phased in," said Daniel Steingart, a vice president at Moody's. "Transitioning federal Medicaid payments to a per-capita, or block grant system, and freezing Medicaid expansion would reduce the number of people with insurance and increase hospitals' exposure to bad debt and uncompensated care costs."
The proposed Senate bill would leave states to fill the gap or end coverage as the enhanced federal payments for Medicaid expansion implemented under the ACA would be phased out over seven years. The Congressional Budget Office estimated that the House version of the bill would leave 23 million individuals uninsured.
"It is critical that Congress preserve coverage for the more than 15 million newly enrolled people who have received health coverage in recent years and also preserve the option for states that have not expanded Medicaid to increase coverage," Anthony Tersigni, president and CEO of St. Louis-based Ascension Health, wrote in an op-ed for Modern Healthcare. "Congress should take steps to preserve the safety net instead of enacting Medicaid cuts that will do serious harm to healthcare access for the vulnerable."
The Senate bill, known as the Better Care Reconciliation Act of 2017, could cap the growth of federal Medicaid payments at the medical inflation rate—estimated to be 5.6% annually—starting in 2020. Come 2025, the growth of those payments would be limited to the Consumer Price Index rate, which has averaged around 1.4% since the Great Recession.
Curtailing Medicaid would lead to a "terrible and distracting" debate on how states should fund healthcare coverage, said Dr. Bruce Siegel, president and CEO of America's Essential Hospitals.
"Today's Senate bill makes few material improvements to the deeply damaging House legislation and might be worse overall," he said. "For the hospitals that protect millions of Americans and their communities—our essential hospitals—this bill might even accelerate decisions by some to reduce services or close their doors."
If the Senate passes the bill, it would have to get through the House for approval.
Alex Kacik is the hospital operations reporter
for Modern Healthcare in Chicago. Aside from hospital operations, he covers
supply chain, legal and finance. Before joining Modern Healthcare in 2017,
Kacik covered various business beats for seven years in the Santa Barbara,
California region. He received a bachelor's degree in journalism from Cal Poly
San Luis Obispo in Central California.
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