The CEO of the nation's largest public health system has ambitions to win more commercial market share to subsidize care for the poor. But his system, the New York City Health and Hospitals Corp., will need to move quickly and aggressively because it is facing serious financial problems due in part to the Affordable Care Act, a new report found.
The city-owned system will face an operating deficit of $1 billion in two years and dwindling cash reserves as the ACA reduces supplemental funding to hospitals that historically offset the cost of care for the uninsured, the New York City comptroller said in a report released Monday.
The loss of the federal Disproportionate Share Hospital funding will account for one-quarter of the Health & Hospital Corp.'s $1.54 billion projected deficit in 2019, City Comptroller Scott Stringer reported. The cost of care for the city's undocumented immigrants—who do not qualify for Medicaid or subsidized coverage under the ACA—will continue to strain budgets as the federal aid shrinks, Stringer said. He called for Congress to delay the DSH cuts and to allow ACA coverage for undocumented immigrants.
The HHC system is seeking to boost revenue by attracting more insured patients. “In this new environment, the marketplace will dictate and decide which hospitals will remain open, which hospitals will struggle and which hospitals will close,” Dr. Ramanathan Raju, CEO of the New York City Health and Hospitals Corp., told employees in April.
On at least one front, the comptroller said the system's efforts may fall short. Enrollment in the Health & Hospitals Corp. health plan sold on the state-run exchange “may not reach initial estimates.” Revenue will offset only 28% of the lost federal aid, he said.
New York state enrolled 2.1 million people in exchange plans for 2015. As of February, the comptroller reported 29,000 were enrolled in MetroPlus of the 45,000 who enrolled though the exchange last year. Total enrollment in MetroPlus, the Health and Hospitals Corp.'s health plan, inside and outside the exchange, was 474,000 inside and outside the exchange as of May 1.
Raju said his system is working to attract and keep patients by improving healthcare access, thus increasing member satisfaction. “We really want to get more market share,” he said. “We want to increase MetroPlus enrollment. We want to increase our capacity. We also wanted try to improve patient experience within our system.”
He anticipates that will help to shore up the system's money-losing operations. “By increasing the access, increasing the patient experience, we should be able to grow our market share so we are able to subsidize the uninsured care in our system.”
He stressed overall growth, not just growth in MetroPlus. “I don't care if it's in Medicaid or exchanges or Medicare or commercial plans, so long as the trajectory is upward, I'm OK with that.”
About two-thirds of patients admitted to the Health & Hospitals Corp.'s 11 hospitals last year were enrolled in Medicaid. Another 22% were covered by Medicare and 10% had other insurance. The remaining patients paid their own bills. On the outpatient side, the uninsured accounted for 26% of all care, while Medicaid made up another 50% of ambulatory patients last year. Medicare and other insurers accounted for 14% and 10% of ambulatory care, respectively.
Raju endorsed Stringer's proposals for congressional action. He called for ensuring healthcare access for undocumented immigrants. Community health depends on access to care for every member of the community, something that was clear when Ebola remerged as a threat last year, he said. “In this world, your health depends on my health.”
Health and Hospitals Corp. officials also are working with state lawmakers to combine HHC's Options program—which provides free or discounted care to those without insurance—with the state's newly approved Basic Health Plus plan. The system wrote off $592 million last year for patients who were unable to pay all or some of their bills.
The Basic Health Plus program was authorized under the Affordable Care Act as a health plan for those with income between 138% and 200% of the federal poverty threshold. It will cover some immigrants who are not citizens or legal residents.
Raju praised the Affordable Care Act but said it did not go far enough. “It gave insurance to many, many people who never had insurance in the past,” he said. “The ACA also left behind a group of people, especially undocumented immigrants who, even if they wanted to get insurance, they couldn't buy it in the exchange.”
Despite their own qualms, the congressional Democratic authors of the ACA excluded undocumented residents from the exchanges to fend off criticism from political opponents who said healthcare reform would make taxpayers pay for healthcare for illegals.