Forgotten Roots

GOP Health Care Bill Is a Disaster for Tom Price’s Home Hospital

Health and Human Services Secretary Tom Price got his start at Grady Memorial Hospital—and now the bill he’s helping to pass may destroy its work.

Photo Illustration by The Daily Beast

ATLANTA — On any given month, Georgia’s largest hospital, Grady Memorial Hospital in Atlanta, will admit roughly 2,400 sick or injured patients and observe 800 more. Its specialty clinics, including its stroke, trauma and burn centers, will complete 25,000 patient visits. Its neighborhood clinics will have another 14,600 or so more. Grady’s ER will see about 11,800 visitors, and its EMS teams will log roughly 11,000 responses.

In many cases, Grady will do this for Atlanta’s poorest citizens, in its poorest neighborhoods, at little-to-no cost because the hospital remains the city’s safety-net hospital, serving all patients regardless of their ability to pay.

Grady is also the place where Donald Trump’s Secretary of Health and Human Services Tom Price got his start in medicine, serving first as a medical resident and then later as medical director for its orthopedic clinic.

At his confirmation hearing, Price called his time at Grady “so incredibly fulfilling,” but Price is now leading the administration’s effort on the bill that has leaders at Grady and the nearly 300 other safety-net hospitals around the country deeply worried about their future.

“The CBO estimated that the bill would take nearly $900 billion out of Medicaid over 10 years. That is a huge sum that would be absolutely catastrophic to low income communities across America,” said Beth Feldpush, senior vice president of policy and advocacy for America’s Essential Hospitals, the trade group for safety-net hospitals, including Grady. “We think the impact of the bill could be devastating to the communities we serve and the hospitals that care for them.”

In addition to the Medicaid cuts, Feldpush said safety-net hospitals would also see a significant drop in the number of their patients with insurance, as low-to-middle income people lose the ACA subsidies that help them afford insurance coverage. An Urban Institute study estimates that total uncompensated care costs would quadruple and mostly fall to the hospitals providing the care. “It is not feasible to expect that providers could absorb the full amount and remain financially viable,” the study concluded.

For Grady, whose patient payor mix includes 27 percent uninsured patients, 20 percent commercially insured, 28 percent Medicaid patients, and 25 percent Medicare patients, passage of the AHCA would have “a remarkably negative impact” on the hospital, according to an impact study of the bill. A surge in uninsured patients would overwhelm Grady’s capacity “and put the hospital’s financial stability at significant risk.” An $8- to $12-million annual loss from patients who have commercial insurance through the ACA would create a shortfall the hospital could not absorb.

“That’s very difficult to swallow and that’s really the least of our problems financially with this legislation,” said John Haupert, the CEO of the Grady Health System.

The biggest problem, Haupert said, are the massive cuts to Medicaid funding in the legislation, which block grants and caps Medicaid funding for states at a drastically reduced level than they get today. If the state of Georgia cannot or will not make up the difference, Grady will eventually face a $65 million shortfall every year. That will mean cuts to staff, services, facilities, or all of the above.

The timing for Grady could not be much worse. After nearly closing its doors in 2007 amid a governance crises and budget shortfalls, the hospital has managed to engineer a near-complete restructuring and turnaround. With support from Atlanta business leaders and major gifts from foundations, the hospital now runs one of the nation’s leading stroke centers, the state’s leading trauma center, its only pediatric and adult burn center and its first psychiatric emergency department. The hospital has focused on pushing care into the community, even making house calls on people who have been identified as high risk of readmission or those who can’t or shouldn’t leave their homes.

“It’s improve the quality, reduce the costs,” Haupert said.

Even with Gov. Nathan Deal’s decision not to expand Medicaid in the state through the ACA, Grady has been able to meet its mission, expand its services, and pay its bills. That would change if the AHCA passes. “I’m worried. I’m not on the ceiling, but I’m worried,” Haupert said.

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Health care leaders across the country have described a series of decisions states, and then hospitals will have to make in the face of major Medicaid cuts in the bill. For states that cannot go into deficit spending, that means tax hikes, cuts to other services, or passing the cuts onto the hospitals. Larger hospitals will likely shrink to fit their budgets. Smaller and rural hospitals could have to close altogether.

“Hospitals are going to cut out the things that bring in no revenue or very little revenue first,” said AEH’s Beth Feldpush. “You don’t get reimbursement as a hospital to pay the salaries of social workers, but you do it because it’s how you best care for your patients. There’s no reimbursement for the van that sees kids with asthma in schools. That’s the type of program they have to cut first.”

Dr. Yuvaram Reddy is a resident in internal medicine at Boston Medical Center, the safety-net hospital in Boston. He estimates that 60 percent of his patients are on MassHealth, the state’s Medicaid-supported health program. He’s worried for his patients.

“My biggest fear is that most people don’t realize how much they have to lose with the AHCA and they may not realize that for two or three years,” he said. “By trying to switch them to a private insurer and then limiting the amount of care they can receive, it would force patients to seek less preventative care. It would be very bad for individual patients.”

For Price’s role in the AHCA specifically, Reddy said, “It is difficult for me to see how someone who has worked at a safety net hospital could feel that a plan that provides less benefits to patients would be beneficial. I’m mainly not sure how to connect the dots there.”

Grady’s John Haupert said hopes the Senate will slow down and rework the bill. He’d like to see senators focus federal payments for safety-net care on the 300 safety-net hospitals, instead of the 5,000, sometimes wealthy hospitals that apply for the funds. He also believes Grady’s work to push preventative care into communities to avoid expensive emergency care should inform federal funding for all health care.

But Haupert said the bill Republicans are poised to pass Thursday would leave Grady, and the thousands of low-income patients they see every month, in “a mess.”

“A whole lot of reversing the taxes in the ACA is funded on the backs of Medicaid, which, as well know are low-income individuals and that’s primarily who we serve,” he said. “It’s a message to the less fortunate population that you’re on your own. Figure it out.”

And Haupert has a message for Dr. Price, too.

“My message is we can’t forget the people who need health care and can’t afford it,” he said. “All we’re doing is increasing the cost of care by making health care less accessible. Why would we do that?”