Medicaid Cuts Could Lead to Hospital Closures

Hospitals Relying on Privately Insured Patients Should Still Do Fine

An article in the Philadelphia Inquirer notes that the drastic cuts to Medicaid that are being considered will affect institutions, as well as people. Michael J. Stephen, MD, an associate professor of medicine at Drexel University College of Medicine, says that there’s a real chance that hospitals that cater to poorer clientele will close if Medicaid is cut too drastically.

Stephen notes that Philadelphia is the only major city without a municipal hospital, and he runs down a list of hospitals that do such service that have closed over the years. They relied on Medicaid and Medicare dollars.

“With further cuts in Medicaid looming, it is easy to envision more hospitals closing,” Stephen writes.

Philadelphia does have large research hospitals, but Stephen argues that they benefit from an unbalanced system that benefits employers and the private health insurance plans that serve them.

“Under current law, employers are tax exempt from money paid in health insurance premiums, to the tune of $250 billion dollars annually,” Stephen notes. “This is in effect a massive government subsidy to those hospitals that are able to get private health insurance dollars.”

The upshot? If “you have a rare type of leukemia that qualifies for genetically engineered white blood cells AND you have great private insurance, Philadelphia is a great place to find a hospital. If you’re a wheezing asthmatic because of pollution in your neighborhood who needs some inhaled steroids and a nebulizer treatment every once in a while, pretty soon it seems like you’re going to be out of luck in this town.”

Source: Philadelphia Inquirer