Georgia Hospitals Face Fiscal Crisis

Since 2013, five rural medical centers in Georgia have closed, and countless others are struggling to stay afloat financially. From restructuring to cutting services, many hospitals are changing in whatever means necessary to survive.

This financial crisis was unintentionally brought on by the Affordable Care Act (ACA) and related legislation that followed it.

Before the ACA, many hospitals in Georgia relied on federal funds from the Disproportionate Share Hospital (DSH) federal payment/reimbursement program to offset the costs of treating patients without insurance. When the ACA was implemented, plans were made to phase out the DSH.  It was assumed that all patients would have healthcare under the ACA.

However, things became more complicated when the Supreme Court ruled against a provision in the ACA requiring states to expand Medicaid. Governor Nathan Deal, like many Republican governors, rejected expanding Medicaid due to the costs of such a program.

DSH payments are set to end on January 1, 2018. More than 400,000 Georgians remain uninsured today.

Hometown Health CEO Jimmy Lewis states that in the Healthcare system’s current state, the end of DSH will especially hurt rural healthcare locations, making healthcare less accessible to residents in small communities. Large hospitals that are required to provide care for the uninsured will also find themselves in a bind.

In a recent Atlanta Magazine interview, Deputy Director of Policy for the Georgia Budget and Policy Institute Tom Sweeny stated that Georgia must expand Medicare (as originally planned) to solve the dilemma:

“It addresses the coverage issue and it brings $3 billion into state’s healthcare system. If hospitals weren’t getting paid to deliver care, this would pay them. In the long term, it’s delivering care in lower cost settings than hospitals.”

The Georgia Chamber has hired two previous Deal staffers, former spokesperson Brian Robinson and former health policy adviser Blake Fulenwider, come up with a solution. Though Robinson advocated against Obamacare previously, he now has a different perspective. The effects of the current dilemma will be felt by many—both in healthcare and in the economy:

“This affects businesses and individuals,”…“If a hospital closes and it’s a lot farther to get treated for a stroke, it’s significantly harder to attract major economic developments for those regions. Employees don’t want to go where they can’t get health care.”

The Georgia Chamber plans to release officially recommended plans to expand Medicare by the end of the year, with the intention of gaining supporters to bring such plans to the table during next year’s session.


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