The Mission and Responsibility Remains as the Money Leaves

The math is clear.  The Affordable Care Act (ACA) has successfully reduced the number of uninsured patients nationally and in New York City.  The federal government therefore is reducing the Disproportionate Share Hospital (DSH) payments which have traditionally gone to hospitals that serve large number of uninsured patients.  If there are less uninsured patients according to this logic, then less money outside of the insurance system is needed to cover their care.  But there is a problem.

According to New York City Comptroller Scott M Stringer’s recent report Holes in the Safety Net, also reported in the New York Times,  prior to the ACA becoming law, approximately 1.2 million New York City residents were uninsured.  As of March 2014 800,000 remain uninsured.  Many of the 800,000 are undocumented immigrants ineligible for the health insurance provided by the ACA. (page 3)

The New York City Health and Hospitals Corporation (HHC) is an integrated healthcare system of hospitals, neighborhood health centers, long-term care, nursing homes and home care — the public safety net healthcare system of New York City (see website).  It is the largest municipal healthcare system in the United States.  HHC is the  primary care provider of undocumented immigrants in New York City.  HHC stands to lose 381 million dollars in DSH money in 2019, and this equates to about 25% of the projected deficit of $1.54 billion in FY 19.  However, HHC does not expect a comparable decrease in uninsured patients.  According to the Comptroller’s report, between FY 2013 and FY 2014 uninsured patients seen by HHC dropped only 1.3 % (page 12).

The report concludes that “This imbalance would imperil HHC’s finances by penalizing HHC for continuing to act as the provider of last resort to New York City’s uninsured.” (page 12).

One solution would be to offset the loss with an increased number of patients signing up for HHC’s option on the state exchange- Metro Plus.  Unfortunately MetroPlus is having trouble holding onto its members.  According to the Comptroller‘s Report Metro Plus lost 29,000 of its original 45,000 members by February 2015.  Many of these members failed to pay premiums despite Metro Plus being one of the least expensive plans (page 12).

What is to be done?

The Comptroller’s report makes some recommendations.  First, delay the DSH cut until a more logical and equitable financing arrangement can be made.  Second, allow undocumented residents to sign up for the health care coverage under the ACA.

But the most interesting suggestion, and perhaps the most complicated in New York City, is to rethink how funds are allocated in order to best assist patients in need.  As the report suggests “The State Legislature should promptly implement a more equitable formula that targets the DSH funding pool to hospitals based upon their actual delivery of care to high quantities of the uninsured.”  (page 15).

In short when it comes to financing care for those without insurance we need evidence based approaches that examine who is actually providing that care.  It is both unethical and potentially dangerous to put HHC in the position of providing care for the patients the rest of the health system ignores, while not funding that care.