All people, regardless of financial or social status, can count on essential hospitals for care. These hospitals, at the core of the nation’s health care safety net, operate where the need is greatest—from the nation’s largest cities to broad rural regions and in communities plagued by high rates of poverty, homelessness, food insecurity, and other social and economic barriers to good health.
Low-income working families, the uninsured, and other vulnerable people depend on essential hospitals for primary to complex care. The chart to the right summarizes the key features that distinguish essential hospitals and make them cornerstones of community health and local economies.
Essential hospitals do all this with an average operating margin about half that of other hospitals and a disproportionate level of uncompensated care. Our members—about 6 percent of all U.S. hospitals—provided about 14 percent of the nation’s uncompensated care, or $5.5 billion, in 2016. About three-quarters of their patients are uninsured or have Medicaid or Medicare coverage.
Given their thin margins and vulnerable patient populations, essential hospitals need every dollar of federal support to keep their doors open. But recent policy changes have drained this vital funding and threaten a financial crisis at these hospitals. Deep cuts to hospitals in the 340B Drug Pricing Program and dramatic reductions in Medicare outpatient payments weaken our hospitals and jeopardize access to care in their communities. With draconian cuts planned for Medicaid disproportionate share hospital (DSH) support in 2019 and proposed immigration policy changes expected to swell uncompensated care, essential hospitals—and health care access nationwide—face a troubling future.
Without action by Congress, communities nationwide will lose access to care and vital support services. The Medicare policies detailed in this Our View are a significant threat to essential hospitals and their vulnerable patients. Taken together with the public charge proposal and the scheduled cut to Medicaid DSH funding, the impact on the health care safety net would be damaging and unsustainable. Essential hospitals call on Congress to protect access to care by:
- reversing the unreasonable expansion of site-neutral Medicare payment cuts to grandfathered facilities;
- suspending the Medicare Part B payment cut to 340B hospitals; and
- averting the Medicaid DSH reductions scheduled to start October 1, 2019.