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NYC Health + Hospitals Article in NEJM Examines How ACA Provisions Affect Safety-Net Health Systems Nationwide

Article flags funding issues, differences between states, and delivery system improvements, while raising concerns about future federal and state policy decisions

Nov 03, 2016

New York, NY

An article in the new issue of the New England Journal of Medicine examines how coverage provisions of the Affordable Care Act are affecting safety-net health systems across the United States. Written by two leaders from NYC Health + Hospitals (the largest public health care system in the nation) and a researcher from the NYU College of Global Public Health, the article also characterizes the responses of these systems to payment reform and charts future directions in scaling up improvements and innovation in delivery systems.
“This article is important because it takes a national look at safety-net health systems and examines a range of challenges, some faced by a subset of providers and others shared by all,” said Dr. Ram Raju, president and CEO of NYC Health + Hospitals. “Most of these systems are struggling in relative isolation, while it’s clear that a broader national response is needed, especially when we now understand that tens of millions of Americans and others will remain without health coverage even after full implementation of the Affordable Care Act. The truth is that the health of our nation depends on the health of all who live here, and safety-net providers play a key role.”
“Our article really underlines the importance of rethinking how we pay for the health care for vulnerable patient populations,” said Ross M. Wilson, MD, chief transformation officer of NYC Health + Hospitals and an author of the article. “Safety-net systems across the country are clearly facing challenges based on the complexity and risks associated with current payment models.”
The article notes that, while some hospitals have benefited financially from expanded health insurance coverage resulting from the Affordable Care Act, this expansion may not be sufficient to offset reductions in federal payments for uncompensated care, especially given that Medicaid and Medicare Disproportionate Share Hospital allotments—funding that provides supplementary income to hospitals that treat uninsured and underinsured patients—are scheduled to be cut back by growing percentages in the coming years.
According to the article’s examination of the impact of payment reform on safety-net health systems, studies of programs created under the Affordable Care Act to incentivize quality and efficiency have shown that some safety-net hospitals face a higher risk of being penalized for factors beyond their control, such as patients’ socioeconomic status. On the other hand, safety-net systems have natural advantages with respect to another priority: coordination of care. According to the article, “the realities of caring for a vulnerable population with few resources [have] spurred delivery-system transformation.”
The article also compares safety-net systems in the 31 states (and the District of Columbia) in which Medicaid eligibility was expanded with those in the 19 states in which it wasn’t. The article demonstrates that this difference is associated with changes in the states’ respective payer mixes, with providers in expansion states recording increases in inpatient discharges and outpatient visits among Medicaid enrollees and corresponding decreases in both categories among the uninsured. In non-expansion states, the trends for these populations are essentially stable before and after implementation of the Affordable Care Act.
Of greater concern in non-expansion states, safety-net providers face the risk of reductions in federal subsidies (such as Disproportionate Share Hospital allotments) for uncompensated care while continuing to carry a large share of uninsured patients.
The article also examines efforts to improve delivery systems through increasing capacity, extracting efficiency, better coordinating care, investing in infrastructure, and solidifying the patient base. Perhaps the most promising innovations, according to the article, are efforts to address the social needs of patients, including housing support and social services.
The article concludes with a call for additional study, particularly of the local dynamics of changes in insurance status and the financial ramifications for healthy systems. “Yet federal and state policymakers may have to make major decisions…with imperfect information…. The challenge at all levels of policy development is to guide improvement in delivery systems while preserving the essential services provided by safety-net health systems in communities across the United States.”
“Health Reform and the Changing Safety Net in the United States” was written by Dave A. Chokshi, MD, chief population health officer of OneCity Health, a subsidiary of NYC Health + Hospitals; Ji E. Chang, MS, PhD, assistant professor at the NYU College of Global Public Health; and Ross M. Wilson, MD.
The article is available here: http://www.nejm.org/doi/full/10.1056/NEJMhpr1608578