From the East Hampton Press (Jan 25th)

How will our hospitals do with repeal of the ACA? As reported in the East Hampton Press, repeal of Obamacare is predicted to hurt local Suffolk hospitals. About 150,000 people in Suffolk County are at risk of losing health insurance. Robert Chaloner, CEO of Southampton Hospital predicts a sharp rise of uninsured people, crowded ERs, longer wait times, and of course less federal dollars to offset losses. NY State is a Medicaid expansion state. Such states have seen a 34% reduction in uncompensated care costs in clear distinction to those states that did not accept Medicaid expansion (Kaiser CMU analysis of the Medicare Cost Reports 2013/2014). This will disappear with repeal of the ACA.

What does this mean for our local hospitals? I took a look at the financials (Annual Reports) of 9 of them. Together they employ 17,000 people and their combined yearly revenue is $4,719,000,000 (2015) most of which goes into employee salaries and therefore raises the standard of living and the economy in Suffolk County. Four of these hospitals (Peconic Bay, Brookhaven, Stony Brook and Southside in Bay Shore) are designated “safety net hospitals” as they serve over 40% of out-patients (and over 35% of in-patients) that are either on Medicaid, or on Medicare/Medicaid, or are uninsured. These hospitals are most likely to suffer big time. By comparison, Robert Chaloner, quoted in last week’s report, and Southampton Hospital might have it easy, as their profit margin is still relatively high (7.5% in 2014). I note that financial leverage (liabilities/assets) is high among several Suffolk county hospitals ranging from 0.6 to 1.2 (while the national average is 0.46 for non-profit general hospitals). This too represents a risk.

In NY City 16 hospitals have closed since 2003 and another dozen are in precarious financial condition. Throughout the State, there are hospitals that are teetering. They are often “safety net hospitals”. According to New York’s Department of Health Commissioner, “nearly half [of] New York’s 227 hospitals are financially distressed.”

The brewing storm after repeal of the ACA will likely dwarf the many complaints about Obamacare. Just listen to Congressman Zeldin who can’t stop complaining, but has not provided any constructive solutions to save our hospitals and the related local medical economy, which includes salaries for hospital health-care workers, including doctors.

David Posnett MD