Hospitals are working hard to figure out how they will respond to enormous Medicaid cuts as a result of the Republican tax bill that President Trump recently signed into law. The hospitals serving wealthy communities and the hospitals serving poorer communities are making very different plans, reports Daniel Payne reports for Stat News.
Many hospitals are strategizing about where to cut services to save money. The loss of Medicaid dollars could have consequences as dire as the Covid-19 pandemic. But, some are seeing the Medicaid tax cuts as an opportunity to use new technologies and provide new types of care.
Hospitals are not only losing significant revenue to cover patient care. They are losing massive amounts of research funding from the federal government. The National Institutes of Health has cut back a lot of its research money.
Some 15 million Americans are expected to lose health care coverage as a result of the tax law. The law cuts more than $1 trillion in Medicaid funding. While most provisions of the law do not go into effect immediately, many health care providers are planning ahead. They need to.
Hospitals must treat all patients, even patients who don’t have insurance. With a major increase in the number of uninsured and underinsured patients, hospitals will be facing a huge rise in uncompensated care. Raising provider rates for insured patients is likely part of most hospitals’ plans, but higher provider rates are not likely to fill the gaping hole in hospital budgets.
A typical hospital will lose between 40 to 70 percent of its business, as a result of the Medicaid cuts. So, in addition to raising commercial rates, hospitals are likely to cut some services, particularly the ones that are costing them money or not making them money, such as behavioral and pediatric care. Ob-gyn care is also not a money-maker. Hundreds of rural and safety net hospitals will likely close.
Some hospitals see a chance to become more efficient. They might buy provider groups. Or, they might invest in artificial intelligence to improve their performance at low cost. But, there’s no telling whether these options will work and ultimately save them money.
Here’s more from Just Care:
- Doctors and hospitals face increasing claims denials
- Immediate effects of Trump’s tax bill
- How to save Medicaid dollars? Remove Medicaid’s insurer middlemen
- Medicare Advantage insurers are killing rural hospitals and communities
- Half of rural hospitals are losing money, closing units
