SF General will lose much of its federal subsidy under Obamacare

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As President Obama’s Affordable Care Act is phased in over the next couple years, San Francisco General Hospital will lose at least 25 percent of the $123 million it receives from the federal government to offset costs of caring for the uninsured, but hopefully that will be offset by its expansion of those who will have health insurance.

General Hospital receives those funds for being a so-called “safety-net hospital,” a place where those without insurance can still get quality healthcare. Even though the need for such safety nets is supposed to diminish under Obamacare, SF General will remain a critically important safety-net hospital.

Many San Franciscans – including non-U.S. citizens who won’t qualify for coverage under the Affordable Care Act, as well as homeless individuals – will continue to rely on the hospital when in need of medical care.

Yet here and nationwide, concern is brewing about whether funding for safety-net hospitals could be impacted if enrollment in the new state health exchanges doesn’t reach anticipated levels.

“The financial question every state is asking is: What are the newly eligible patients going to do? What plan will they enroll in? Will they enroll?" Greg Wagner, CFO of the San Francisco Department of Public Health, told the Guardian, referring to the health insurance marketplaces created under the Affordable Care Act.

Most safety-net hospitals in the country are bolstered with federal subsidies, and are especially reliant on funds known as disproportionate share hospital payments, or DSH. However, those subsidies are about to be slashed with machete-like strokes.

All told, as much as $18 billion nationwide could be siphoned away from safety-net hospitals by 2020. Compounding that is another $22 billion that could be cut from Medicare subsidies, depending on the number of insured.

There’s an expectation that the looming safety-net budget cut will be offset by the burgeoning population of insured residents who would flock to state health exchanges. It makes sense: Instead of absorbing the entire cost of an uninsured patient, hospitals would be getting money from newly active insurance policies, and no money would be lost.

The New York Times recently ran a story detailing how low-income patients in Georgia may be put in a precarious position under federal healthcare reform because safety-net hospitals in Georgia might not be able to make up for lost funding once DSH payments evaporate.

California isn’t likely to experience this problem to the same degree, Wagner said, because the state chose to expand Medi-Cal, the state version of Medicaid, to include all low-income residents and not just those who previously qualified under a narrow set of criteria. Georgia had the same option to expand, but chose to keep its Medicaid qualifications in place, like many states led by Republicans looking to tweak President Obama.

As things stand, enrollment in Covered California – the state’s health insurance marketplace under the Affordable Care Act – remains low. Until enrollment closes at the end of March, it’s an open question whether it will reach the necessary levels to make up for pending cutbacks.

So far, 59,000 Californians had completed applications and enrolled in health insurance plans within the new marketplace as of Nov. 13. That’s a drop in the bucket, considering that 2.3 million are eventually expected to enroll. According to state data, 203,904 applications had been started online (reflecting an estimated 370,000 individuals). In addition to those applying for Covered California plans, another 72,000 people were determined eligible for Medi-Cal. 

"SF General operates on a huge amount of federal money," Wagner explained. "Some comes directly from the federal government, and some comes from DSH.” He said the hospital received $123 million in DSH funds last year, “and not all of that will go away” once cuts go into effect.

"Healthy SF will still be around after March 31," said Wagner. "We're still retaining the program for anybody not eligible for Medi-Cal, and through Healthy SF those people can still access primary healthcare."
He even said that under extreme circumstances, like the delivery of a child, for instance, some undocumented immigrants will have the opportunity to enroll in Medi-Cal. 
And it's not all gloom-and-doom on the subsidy front, either. There is a safety-valve for the safety-net hospitals: If everyone who is expected to enroll in Covered California actually does so, the funding will be available without the need to rely on federal aid. 
But in order to achieve that idyllic plateau, a serious push is needed on the enrollment level. Granted, those enrollment figures should rise. But what if they don't? 
"If people don't enroll in the new programs, it will be a big problem," said Wagner. "If we have a significantly lower enrollment number than we initially predicted, we will have some major financial issues. There's still some uncertainty.”

He added, “We'll still provide care for the uninsured at SF General. The money will decrease, but it won't disappear. By no means will all of the money go away. The hope is that the newly enrolled will offset the decreasing number of uninsured, then the federal government could take the DSH payment and redirect it to the providers.” 

That being said, “we still have lots of optimism moving forward,” Wagner said. “We think people will enroll."

[Correction: We corrected the amount of the reduction from 50 percent down to 25 percent].

 

Comments

and now, with the fatally flawed roll-out of ObamaCare, they are starting to see the downside of that, and how the law of unintended consequences always applies.

Article asks if people who now have insurance will choose SFGH over UCSF, CalMed or St. Marys? I can answer that question. No.

Posted by Guest on Nov. 19, 2013 @ 11:15 am

A commenter below claims that the United States epitomizes medical excellence because our health care system is based on profit making.

The reality is that the US ranks a dismal 17 among the leading industrial powers of the world in health outcomes.

See: http://www.theatlantic.com/health/archive/2013/01/new-health-rankings-of...

Posted by Eric Brooks on Nov. 20, 2013 @ 11:02 am

American exceptionalism works the other way as well.

Posted by marcos on Nov. 20, 2013 @ 11:25 am
Posted by Guest on Nov. 20, 2013 @ 11:47 am

The numbers is the article that I posted show, that the US is exceptionally bad at delivering health care.

Posted by Eric Brooks on Nov. 20, 2013 @ 11:58 am

you have no money, have no insurance, and get sick a lot.

Posted by Guest on Nov. 20, 2013 @ 12:09 pm
:)

...

Posted by Eric Brooks on Nov. 20, 2013 @ 12:24 pm

always dismisses it as "absurd" or "nonsense" or "ridiculous" or some such.

As if that is persuasive.

The US may not be #1 out of 200 nations on healthcare, or on any other single measure. but the US stats are distorted by the bad ehalth of those who do not buy insurance.

If you compared those with insurance in the US, with those elsewhere, you'd see our outcomes are superior.

Posted by Guest on Nov. 20, 2013 @ 11:26 am

Can we get serious here please.

The peer reviewed study cited in the link I provided in my response clearly shows that your claims about US medical superiority are completely ridiculous.

Posted by Eric Brooks on Nov. 20, 2013 @ 11:50 am

The US figures include the uninsured. Take those out and out figures are much higher.

Posted by Guest on Nov. 20, 2013 @ 12:44 pm

Countries which have socialized medicine don't have uninsured citizens and they still have better health outcomes than we do; including health outcomes for the wealthy and insured.

From: http://inequality.org/inequality-health/

"A 1998 study of 283 U.S. metropolitan areas found that mortality rates climbed in tandem with the level of economic inequality. The highest mortality rates were found in the most unequal metropolitan areas and the lowest mortality rates were found in the most equal metropolitan areas.

This association affected everyone, rich and poor alike, in a given metropolitan area. The relationship between inequality and poor health was so strong that the low-income population living in a low-inequality area had a significantly lower mortality rate (812.4) than that of the high-income population living in a high-inequality area (895.5)"

Posted by Eric Brooks on Nov. 20, 2013 @ 1:12 pm

rich and the insured having less good care so that the poor and the uninsured can have better care. I do not believe that most voters support that premise.

Posted by Guest on Nov. 20, 2013 @ 1:25 pm

It says exactly the opposite of what you just claimed it says...

Posted by Eric Brooks on Nov. 20, 2013 @ 1:35 pm

Do you envisage, with your single payer system, that I will no longer be able to get healthcare through my current plan, with which I am very happy?

Yes or No?

Posted by Guest on Nov. 20, 2013 @ 1:49 pm

You will most likely not be able to retain your current plan.

Posted by Eric Brooks on Nov. 20, 2013 @ 2:17 pm

my current health insurance, which I am very happy with, then your idea is a non-starter.

Posted by Guest on Nov. 20, 2013 @ 2:28 pm

And as soon as businesses and corporations have had enough of throwing massive amounts of their profits down the private health insurance rat hole, most of them will join in as well.

Posted by Eric Brooks on Nov. 20, 2013 @ 2:42 pm

That's your response to everything. The world will become a socialist nirvana as soon as this and that and the other.

You live permanently in a mythical future that will never happen instead of addressing the real world and actually LISTENING to people instead of talking all the time.

The people are not buying what you are selling.

Posted by Guest on Nov. 20, 2013 @ 2:57 pm

Big Daddy government at its worst.

Posted by The Goebblin Love Child of Smaug on Nov. 20, 2013 @ 3:01 pm

He's like a walking charactiture of the clueless.

Posted by Guest on Nov. 20, 2013 @ 3:10 pm

What exactly am I supposedly 'wrong' about.

Let's just take one at a time...

Posted by Eric Brooks on Nov. 20, 2013 @ 10:19 pm

All you have shown is that wealthy people are treated much better than poor people in the United States. The US is a great place to be rich.

It is much better to be middle class or poor in almost any industrialized country in the world.

This is true with healthcare along with almost anything else.

Posted by GlenParkDaddy on Nov. 20, 2013 @ 12:22 pm

more and better stuff than not having money? Really?

Well, I guess that explains why people like to work hard to get money then. I always wondered about that.

Posted by Guest on Nov. 20, 2013 @ 12:46 pm

See, that is the fundamental difference between me and you. I think humans have a right to live, liberty and the pursuit of happiness.

You think that you can only have the things that you can buy. Only rich people deserve decent medical care in your world.

Posted by GlenParkDaddy on Nov. 20, 2013 @ 1:01 pm

Don't be fooled by fraudulent nonprofits, such as Mark Goldes' Aesop Institute. Read reviews: http://physicsreviewboard.wordpress.com/aesop-institute/

Posted by Guest on Nov. 19, 2013 @ 11:34 am

Can I assume that you would not support that extreme viewpoint?

Marcos has also outlined some very cogent objections to non-profits in SF.

SFGH isn't really a non-profit though. It makes a massive loss, and that loss is heading much higher under ObamaCare, which itself is going to be a financial disaster, as the old, sick and poor sign up, and the young, fit and wealthy avoid it.

Posted by Guest on Nov. 19, 2013 @ 11:40 am

...a system of socialized medicine.

Obamacare is a ridiculous joke designed by private insurance companies to fail on purpose, while delivering to them millions of new forced customers on a platter.

Hence claiming that the failure of Obamacare is an example of the failure of socialized medicine is utterly ridiculous.

Posted by Eric Brooks on Nov. 19, 2013 @ 12:11 pm

I am OK with the individual mandate and the pre-existing conditions change. The rest is an abortion.

Posted by Guest on Nov. 19, 2013 @ 12:21 pm

Those with existing insurance that they like wanted to keep it, not switch to some system run by government bureaucrats.

The only people who wanted free, universal healthcare were the poor and the sick, meaning it would have been prohibitively expensive.

Posted by anon on Nov. 19, 2013 @ 12:27 pm

For the entire history of the proposal for universal socialized health care in the U.S. a majority of Americans have always supported it.

See the results of various mainstream polls on the matter at:

http://www.medicareforall.org/pages/Chart_of_Americans_Support

Posted by Eric Brooks on Nov. 19, 2013 @ 12:48 pm

the "public option" when Obama presented it, leading directly to the most rapid growth of a political party in US history - the Tea Party?

And why therefore did not even the Democrats in the Senate support it?

If you ask people if they want free healthcare, or free everything, they may well say yes. when they see the real price they have to pay for that, e.g. higher taxes and death panels, they become a lot less keen.

ObamaCare as-is is the best you were ever going to get, and it looks like it's not going to be very good at all.

Posted by anon on Nov. 19, 2013 @ 12:57 pm

Here is just one of the many mainstream poll reports which showed around 60% support for the 'Public Option'.

http://www.reuters.com/article/2009/12/03/us-healthcare-usa-poll-idUSTRE...

Posted by Eric Brooks on Nov. 19, 2013 @ 1:45 pm

when the true cost of unlimited free healthcare for everyone was explained to them, they rapidly rejected the idea.

Posted by Guest on Nov. 19, 2013 @ 1:59 pm

...that the policy would result in higher taxes.

They know quite well that universal health care is not 'free stuff'.

Posted by Eric Brooks on Nov. 19, 2013 @ 4:43 pm

thought it would be great to get unlimited free stuff.

They didn't know they wouldn't be able to keep their own doctor or current plan.

And they didn't know the rollout of even a scaled down version of ObamaCare would be such an unmitigated, expensive disaster.

Posted by Guest on Nov. 19, 2013 @ 4:51 pm

And, Obamacare is not socialized medicine in any sense of the term.

And though your other critiques are legitimate, the 'death panel' issue was simply a myth.

I can't stand Obama or his health care plan, but let's critique him on facts, not fairy tales.

Posted by Eric Brooks on Nov. 19, 2013 @ 5:04 pm

life and death being made by bureaucrats, not doctors.

Make something free and demand trends to infinite, meaning waiting lists, and bureaucrats interference.

The prospect of death panels was real but sanity prevailed and the Dems rejected it.

Posted by Guest on Nov. 19, 2013 @ 5:20 pm

In all of the countries that have single payer health care, doctors and nurses make the decisions, not bureaucrats.

Now that you are parroting absolutely ridiculous Fox 'News' fairy tales, I think we're done.

Posted by Eric Brooks on Nov. 19, 2013 @ 5:31 pm

there were hospital administrators who made decisions about waiting lists and who would get treatment, and who would not.

Free healthcare means that demand always exceeds supply.

Posted by Guest on Nov. 19, 2013 @ 5:36 pm

We have the exact same thing happening here, I don't know how you can think otherwise.

When a liver comes up for someone needed a transplant, how do you think we decide who gets it? Do you think we give it out to the highest bidder?

People without health insurance routinely die due to lack of treatment.

Posted by GlenParkDaddy on Nov. 19, 2013 @ 10:48 pm

The ultimate in bureaucratic rulings over people's lives is lorded over by for-profit insurance companies and HMOs in the US.

Single payer nations have little to none of this. I am sure even in the UK, that the administrators decisions are based on direct input from doctors and nurses.

Not so in the US where insurance bureaucrats make life and death decisions constantly that they have no business involving themselves in; and those decisions are based on maximizing profit.

Posted by Eric Brooks on Nov. 20, 2013 @ 12:00 am

There is no penal of bureaucrats deciding whether you live or die, as there would be with a socialized system.

Posted by Guest on Nov. 20, 2013 @ 6:55 am

So, you are telling us with a straight face that a paper contract, gets up out of its file, and walks over to doctors and nurses, opens its nonexistent mouth, and tells the doctors and nurses what to do.

Completely ridiculous.

In real life, insurance adjusters and HMO financial managers look at those contracts and make subjective decisions about who gets treatment and who doesn't. After making those decisions, they contact doctors and tell them what treatments they can and cannot perform on a patient.

Very frequently, such adjusters and managers illegally withhold treatment which is actually covered (often resulting in the wrongful death of patients). The only reason we can't call this unacceptable system a 'death panel' is that there is no 'panel'. One person alone makes the decision to arbitrarily withhold treatment.

In countries with socialized health care, doctors and nurses make the call on who gets treatment not adjusters and financial managers.

Posted by Eric Brooks on Nov. 20, 2013 @ 10:43 am

Someone has never heard of "pre-approval."

Posted by marcos on Nov. 20, 2013 @ 10:51 am

and doesn't pay out for treatments that are not covered. It's not a person deciding what is covered except by reference to the contract.

If an insurance company were to not approve a covered treatment then they could be sued.

It's a non issue. No bureaucrats make the decision, except in interpreting the contract. And certainly no government bureaucrat, whether part of a death panel or not.

Anyway, it's moot, because Congress rejected single-payer even when the Dem's held the House.

Posted by Guest on Nov. 20, 2013 @ 10:52 am

Insurance companies frequently deny covered treatments all of the time and then grant treatments after appeal or lawsuit. The problem here is that time is often on the side of the insurer, as the patient can always die between the point of denial and determination. Funny how health care works that way, isn't it?

Posted by marcos on Nov. 20, 2013 @ 11:08 am

It's the contract that decides, not a death panel of bureaucrats

Posted by Guest on Nov. 20, 2013 @ 11:16 am

Appeal means a committee of anonymous insurance bureaucrats rationing health care, death panels pushing grandma in her wheelchair over a cliff.

Posted by marcos on Nov. 20, 2013 @ 11:29 am

If you are denied a claim you are entitled to, you can seek a remedy.

Posted by Guest on Nov. 20, 2013 @ 11:53 am
Posted by Eric Brooks on Nov. 20, 2013 @ 11:59 am

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