What Trump’s repeal of Obamacare would mean for one rural Colorado hospital

Kelsey Ray
By: The Colorado Independent

San Luis Valley Health Regional Medical Center in Alamosa is a small hospital with only 49 beds. But it is the only hospital within 121 miles with a labor-and-delivery ward — last year, obstetricians there delivered 435 babies — and it provides oncology, orthopaedic and emergency services. The hospital treats more than 1,000 inpatient visitors and more than 10,000 emergency room visitors each year. Most of those patients are poor and rely on Medicaid.

President Donald Trump’s determination to repeal and replace the Affordable Care Act (ACA) has provoked panic among Colorado’s health care providers, with plenty of hospitals scrambling to understand what will happen next. But the effects of a repeal will be most dramatic at small, rural medical centers like the one in San Luis Valley, where even minor budget cuts can put crucial services on the chopping block.

“San Luis Valley is as good a poster child as any for what is at stake in the state,” says Steven Summer, president of the Colorado Hospital Association (CHA). “And we have grave concerns.”

The San Luis Valley medical center is at particular risk because of its low-income population and relative distance from other health care providers, but other rural hospitals are similarly vulnerable. About half of the CHA’s more than 100 member hospitals are rural institutions.

It remains unclear exactly what actions Trump and the Republican-majority Congress will take in the coming weeks. But one critical aspect of the ACA under threat is Medicaid expansion, a funding source upon which rural hospitals such as San Luis Valley rely heavily.

Donna Wehe, a spokeswoman for San Luis Valley Health, says understanding the looming threat requires understanding how hospitals get paid. When patients have private insurance, their medical bills are largely covered by insurance companies. The federal government reimburses treatment costs for new Medicaid patients under the Affordable Care Act’s Medicaid expansion program. But patients without insurance typically have to pay out of pocket, and medical bills add up quickly. That makes uninsured patients much more likely to default on their debts.

Hospitals like the medical center in San Luis Valley, which serve poor, rural clients, are used to dealing with bad debts and providing “charity care,” which means the occasional forgiveness or partial forgiveness of medical bills.

“Unlike other organizations, as a hospital we don’t get the chance to say we’re not open,” says Wehe. That means providing care upfront — “we carry a big accounts receivable” — even to patients who cannot afford it.

Wehe says the hospital is more than happy to work with patients who need financial assistance, and won’t turn clients away for a lack of insurance or an inability to pay. The demographics of the area mean the hospital often works with undocumented immigrants and transient residents, who either do not qualify for Medicaid or lack the proper paperwork to obtain it. Without the financial benefit of Medicaid reimbursement funds, the hospital will struggle to provide the same breadth of services while continuing to care for these uninsured populations.

“If we have no way of getting reimbursed for the care we’re delivering, that’s just not a sustainable business model,” she says. “If and when these cuts start to happen, rural hospitals will get hurt more than urban hospitals because we are not able to absorb the impact of such large cuts.”

Colorado was one of about 30 states that took advantage of the Medicaid expansion under the ACA. Hospitals and health care providers here now receive 100 percent federal reimbursement for the more than 250,000 new Medicaid patients who enrolled under the expansion plan. San Luis Valley Health, the health care system which oversees the medical center, saw Medicaid’s share of its payor mix increase from 21 to 33 percent since 2014. Its Medicaid enrollment has increased 70 percent over the same period.

“Our story is that persons who gained coverage [under the ACA], got on Medicaid. Very few of our clients moved to private insurance,” says Konnie Martin, the CEO of San Luis Valley Health. “They just couldn’t afford it.”

That coverage increase, Martin says, meant the health system was able to achieve a small positive margin. She used extra funds to replace important medical equipment that was outdated, often several years beyond its life expectancy. The center also raised its trauma level to support 24/7 surgery and orthopaedic coverage to the region, and added specialty services such as cardiology and oncology.

Martin says Medicaid expansion also has meant longer operating hours, shorter wait times and a reduction in overall health-care costs. New Medicaid patients are able to see primary care physicians, which means they are more likely to receive preventative care to ward off more serious health problems. They’re also more likely to make appointments with their physicians rather than resorting to costly emergency room visits at any sign of sickness.

According to the Colorado Hospital Association’s Summer, Colorado has seen an 8 percent reduction in emergency room visits in the past few years. “The fear is of going back to an increase in emergency room use, which means patients don’t have primary care physicians,” he says. “Good health care needs to be at the right time and the right place, and both of those things are violated when people aren’t covered.”

Summer says that in the face of cuts like the ACA repeal would bring, health care centers in more urban areas might spread the burden: Nearby hospitals could choose to split up specialties like obstetrics and oncology. That’s simply not possible in Alamosa. “In [Martin’s] case, she doesn’t have anybody to turn to,” he says.

The importance of the San Luis Valley Health system extends beyond its role as a health care provider. It is a major employer in the region, providing more than $38 million worth of salaries and benefits each year. “We put a lot of people to work,” says Wehe. “So it’s an economic trickle-down effect if we have to start scaling back.”

Emily Bussey, a longtime Alamosa resident and an employee at San Luis Valley medical center, says job cuts would be devastating. “More people would be forced to leave and look for jobs elsewhere,” she said. A mother herself, Bussey says she couldn’t imagine having to travel so far to deliver her babies, and that “depending on the time of year, you probably don’t want to have to go through the mountains.”

Any economic impact would be worsened by the $195 million in health care cuts Gov. John Hickenlooper proposed last year, in anticipation of surpassing the state’s voter-approved spending limits. Colorado also will soon be responsible for 10 percent of the cost of new Medicaid patients, because the federal reimbursement rate will drop to just 90 percent by 2020.

The Colorado Hospital Association says that even if Republicans put forth a replacement plan for the Affordable Care Act, it will “be implemented in a place that is already fragile, thanks to what is happening at the state level.”

Wehe says the Affordable Care Act wasn’t perfect. It “didn’t go far enough,” for example, in providing insurance coverage for people who are self-employed or who don’t qualify for tax credits, and reduced the number of insurance providers available in the state health exchange. But she says it was an important step forward, and hopes to see positive changes in whatever alternative Republicans put forth.

“Health care is a very personal journey, and it is not something that should be upset every time there’s a new presidential election,” she says. “I’m hopeful that because there were some fixes needed under the Affordable Care Act, that maybe there could be some plans and people at the table who will say, ‘This is good, this is how we stay whole.’”

Otherwise, Wehe says, in order to continue providing care to uninsured patients, the hospital could be forced to cut programs based on its bottom line. “We want to be focused on care, we don’t want to have to be focused on profit. This hospital has never been focused on profit.”

As for Summer, he says that despite fears, he has no choice but to remain optimistic. “Look at the institutions that represent the foundations of society: They’re churches, academic institutions and hospitals. We’re resilient,” he says.

Photo credit: Jeffrey Beall via Wikimedia Commons