A major hospital in Baton Rouge, Louisiana is closing its emergency room because it is hemorrhaging money:
Baton Rouge General Medical Center-Mid City will close its emergency room within the next 60 days, a victim of continuing red ink and the Jindal administration withdrawing the financial support that kept it open….
The closest emergency rooms from Baton Rouge General’s Mid City campus is Lane Regional Medical Center, 30 minutes to the north in Zachary, and Our Lady of the Lake Regional Medical Center, 30 minutes to the south on Essen Lane. Mid-City’s ER recorded 45,000 patient visits last year…..
More and more poor and uninsured patients from the low-income neighborhoods of north Baton Rouge ended up at the Mid City hospital, which was the next-closest facility.
Mid City hospital reported losses of $1 million a month as more and more patients who could not pay arrived…. Officials projected losses would grow larger, reaching $25 million to $30 million in 2015.
Poor people can’t pay full freight nor are they likely to be covered by insurance. There just happens to be an extremely attractive offer to get lots of poor people covered by insurance. Medicaid expansion would help safety net hospitals in high poverty areas the most. Poor people covered by insurance will either be able to pay something towards their emergency room visits or divert to lower levels of appropropriate care.
Part of PPACA’s financing mechanism was a reduction in Disproportionate Share Hospital (DSH) payments by the federal government to hospitals that served large numbers of uninsured individuals. The program logic was simple. Medicaid expansion would cover most poor and working poor people who are the most likely not to have been currently covered by insurance in 2010 and the most likely to not be able to pay for their treatments. The total value of unpaid for care would drop significantly over time as Medicaid and Exchanges covered more people, therefore the need for DSH payments would decrease. This logic was based on the assumption that all states would expand Medicaid. And then the Supreme Court said the deal was too damn good and therefore co-ercive and made Medicaid expansion voluntary, blowing up the scheme here.
So Louisiana decided to not expand Medicaid. Its public safety net hospitals have the same demand as before with fewer resources because of a voluntary decision by the state to fuck the poor as well as fucking over some of the largest employers in the state. Cause meets effect.
This is the dynamic that fueled the Tennessee Hospital Association offer to pick up that state’s Medicaid expansion tab. THA hospitals face declining DSH funds without a significant decline in the number of people who can’t afford to pay anything more than a pittance. Medicaid expansion would have been a massive relief valve for their budgets while also helping a quarter million people live better, more stable lives.
The innumerate, paranoid reactionaries in the Tennessee legislature put a kibosh to a plan for the state to receive massive amounts of effectively free money, so the THA members will see significant financial problems in the future as their non-compensated care costs stay constant without some balancing factors from DSH.
It is this interaction of very large employers (as hospitals tend to be one of the two or three largest employers in most state legislature districts that have a hospital) and their cash flow which has a chance of creating a political dynamic that turns out Tea Baggers. What has to happen is the THA or the any of its Confederate state compatriots have to be willing to go to war with Republican opponents of Medicaid expansion. They have to be willing to fund primary challengers, they have to be willing to fund general election challengers, they have to be willing to withhold funds from incumbents that they’ve previously been friendly with if Medicaid expansion is one of their top two or three priorities. If it is not, the Southern poor are fucked.