Hundreds Of Safety Net Hospitals Face Uncertain Future

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Hospitals that serve the neediest patients are bracing themselves through the roll-out of the Affordable Care Act. These safety-net hospitals treat large numbers of people with no health insurance and many are struggling. In New York, a handful of these hospitals are on the brink of closing.

And as NPR's Joel Rose reports, some worry that the health care law will make things even worse, not better.

JOEL ROSE, BYLINE: If you need an emergency room in South Brooklyn, chances are good that you could find yourself at Lutheran Medical Center, where Bonnie Simmons is chair of emergency medicine.

BONNIE SIMMONS: This is the critical care area, all our strokes, our heart attacks.

ROSE: Lutheran has one of the busiest emergency rooms in Brooklyn. Many of the hospital's patients lack health insurance; roughly one in five are undocumented immigrants. In spite of that, CEO Wendy Goldstein says the organization is running a surplus, but just barely.

WENDY GOLDSTEIN: I would put us in the stable but fragile group. We're right on the precipice.

ROSE: Lutheran is not the only New York hospital in a precarious situation. The city has lost more than a dozen hospitals since 2000. Two more in Brooklyn are on the brink of closing. And Goldstein worries that the biggest health reform in decades might actually make things worse.

GOLDSTEIN: We're concerned. We're very concerned about ACA coming up.

ROSE: Here's why. The law is designed to make sure more people get health insurance by expanding Medicaid rolls and subsidizing private insurance plans. That part should be good for hospitals like Lutheran, because it means fewer patients who can't pay their bills. But the designers of the health care law also built in big cuts to a federal subsidy for hospitals that treat a large percentage of Medicaid patients.

Those payments are scheduled to drop steeply, from about $10 billion to just five billion in the next few years. The idea is to slow the growth of health care spending in this country.

DAVID GRUBER: Why now? The reason why is we're running out of money.

ROSE: David Gruber is a health care consultant with the firm Alvarez & Marsal. He says most safety-net hospitals are kept afloat by massive public subsidies. Earlier this year, he tried to figure out just how big those subsidies are.

GRUBER: And we couldn't do the analysis. We spent a whole month, and we couldn't figure out where the money comes from and where it goes. Our own belief is that there's a huge opportunity for re-allocation of the money. There's lot of waste and inefficiencies. And it's not necessarily a bad thing that the less efficient hospitals disappear.

ROSE: But the people who run safety-net hospitals say they're working to eliminate inefficiencies. Those hospitals point out that they'll still have to treat undocumented immigrants who are not eligible for coverage under the ACA. And they're worried that the law will cut spending even more deeply than its designers originally intended.

Bruce Siegel is with America's Essential Hospitals, which represents large safety-net hospitals across the country.

BRUCE SIEGEL: We know that millions of people who were supposed to be covered under the ACA won't. Because Medicaid is not expanding in major states where there are so many people who don't have insurance today.

ROSE: That's partly because of something the Supreme Court ruled when it upheld most of the health-care law last summer. The court found that the federal government can pay for states to expand Medicaid coverage to millions of uninsured people, but it can't actually force states to do it. So far, more than 20 states seem to be opting out of the Medicaid expansion, including big ones like Texas, Florida and Missouri.

RON MCMULLEN: We're not going to see the relief that we were hoping for.

ROSE: Ron McMullen is the CEO of Christian Hospital in St. Louis, a safety-net hospital that serves a large area of Northern St. Louis County. McMullen says Christian was already losing money before the launch of the ACA, about $25 million dollars this year alone.

MCMULLEN: If we'd had this conversation 14, 15 months ago, I would have told you I thought this was really going to help this hospital and help this community. Unfortunately that's not going to happen now.

ROSE: McMullen and other hospital advocates say they still support the goals of the ACA. But they're worried that in practice, the law will strain the medical safety net even further.

Joel Rose, NPR News, New York. Transcript provided by NPR, Copyright NPR.