The historic federal healthcare reform law is welcome news for tens of millions of Americans who will be eligible for insurance coverage now and were not able to get it before, either because they could not afford it or because they have been denied coverage because of pre-existing conditions.
Some of the sweeping law's mandates will take effect in the coming months - such as allowing adult children to remain on a parent's health insurance plan until age 26 and the extension of coverage to people with pre-existing conditions. Other provisions will be phased in over several years and do not begin in earnest until 2014. The full impact of the new law will evolve over time, but it's clear that HHC will continue to play a vital role in the healthcare landscape as New York City's last remaining safety net hospital system.
“In the near term, as we await full economic recovery, the number of uninsured New Yorkers is likely to continue to rise. And the new law will not cover everyone,” said HHC President Alan D. Aviles. “There will still be many in our City who will remain without insurance because they can't afford it, or because they are undocumented immigrants who are prohibited from purchasing insurance under the new legislation. In light of this reality, it is all the more critical that HHC, our city's vast healthcare safety net, remain fiscally stable.”
As the nation's largest public hospital system, HHC for decades has served as the next best thing to universal coverage for a substantial portion of New York City's uninsured residents. HHC serves 1.3 million patients annually, and last year 450,000 of them were uninsured. But HHC is not merely the safety net for the uninsured. The public hospital system runs six trauma centers, two regional perinatal centers, and one burn center, while delivering nearly 25 percent of the City's babies, providing 40 percent of the entire City's hospital-based psychiatric care, and rendering more than 5 million outpatient visits annually.
The new health reform law, formally called the Patient Protection and Affordable Care Act, requires most U.S. citizens and legal residents to have health insurance and will impose a penalty on those who fail to obtain coverage. The law creates insurance exchanges at the state level through which individuals can buy health coverage with lower income individuals receiving some subsidy, but it regrettably prohibits undocumented immigrants from purchasing insurance, even at full market price. It also creates exchanges through which small businesses can buy insurance for their employees. It expands Medicaid for those with incomes at or below 133 percent of the federal poverty level. New York State already provides Medicaid to most people at this new federal threshold.
HHC is facing fiscal challenges borne of several factors, including the rising cost of caring for tens of thousands of newly uninsured patients seeking care at the same time that state budget cuts have led to a nearly $250 million reduction in the system's annual Medicaid reimbursement. HHC is advocating in Albany against further destabilizing reductions to Medicaid funding, and especially for critical continued access to at least the $300 million in additional federal Disproportionate Share Hospital (DSH) funding authorized in last year's state budget.
The federal health reform law calls for the eventual reduction of DSH funding as more of the currently uninsured get access to coverage, but the proposed reduction on a state by state basis will take into account the relative remaining percentage of uninsured.
Embedded within the law are the seeds of future innovation, including payment and delivery system redesign, with funds allocated for pilot and demonstration initiatives to create accountable care organizations, collaborative care networks, global capitation arrangements and other promising models to support more effective and efficient care delivery.
With a relatively advanced electronic medical record system, HHC is well-positioned to work with the federal government and New York State to demonstrate how a large, integrated healthcare system can render cost-effective care that improves long-term outcomes, and thereby reduces long-term costs, for predominately low-income patients, especially those patients with chronic illnesses including asthma, diabetes, hypertension and congestive heart failure.
“The public system has been an essential part of healthcare in New York City during a century of previous failed attempts at comprehensive healthcare reform. HHC will remain indispensable to a healthy City in the post-healthcare reform era ahead,” Aviles said.