What repealing Obamacare would mean for one rural Colorado hospital

San Luis Valley Health Regional Medical Center in Alamosa is a small hospital, with only 49 beds. But it is the only hospital within 121 miles with a labor-and-delivery ward — last year, obstetricians there delivered 435 babies — and it provides critical oncology, orthopaedic and emergency services. The hospital treats more than 1,000 inpatient visitors and more than 10,000 emergency room visitors each year. Most of those patients are poor and rely on Medicaid.

The U.S. Senate’s proposal to repeal and replace the Affordable Care Act, known as the Better Care Reconciliation Act (BCRA), would cut Medicaid spending by about $774 billion over the next ten years. By 2021, the BCRA will essentially put an end to the Medicaid expansion program, and it will significantly cut the rates at which the federal government reimburses hospitals for care to Medicaid patients. It will also end the individual mandate and allow states to rollback coverage requirements for insurance plans. The Congressional Budget Office predicts that under the Republican plan, 22 million Americans will lose health insurance over the next 10 years.

When President Donald Trump took office, his promise to repeal and replace Obamacare incited panic among Colorado’s health care providers, with plenty of hospitals scrambling to understand what would happen next. The release of the Senate bill — and of the House proposal before that — means hospitals can now actually see what changes they could face. The Senate has postponed its vote on the bill until after July 4. Unsurprisingly, the effects will be most dramatic at small, rural medical centers like the one in San Luis Valley — where even minor budget cuts can put crucial services on the chopping block.

“San Luis Valley is as good a poster child as any for what is at stake in the state,” Steven Summer, president of the Colorado Hospital Association (CHA), told The Colorado Independent in February. “And we have grave concerns.”

The San Luis Valley medical center is at particular risk because of its low-income population and relative distance from other health care providers, but other rural hospitals are similarly vulnerable. About half of the CHA’s more than 100 member hospitals are rural institutions.

Donna Wehe, a spokeswoman for San Luis Valley Health, said in February that understanding the threat of repeal-and-replace requires understanding how hospitals get paid. When patients have private insurance, their medical bills are largely covered by insurance companies. But patients without insurance who do not have Medicaid typically have to pay out of pocket, and medical bills add up quickly. That makes uninsured patients much more likely to default on their debts.

Hospitals like the medical center in San Luis Valley, which serve poor, rural clients, are used to dealing with bad debts and providing “charity care,” which means the occasional forgiveness or partial forgiveness of medical bills.

“Unlike other organizations, as a hospital we don’t get the chance to say we’re not open,” said Wehe. That means providing care upfront — “we carry a big accounts receivable” — even to patients who cannot afford it.

Wehe said the hospital is more than happy to work with patients who need financial assistance, and won’t turn clients away for a lack of insurance or an inability to pay. The demographics of the area mean the hospital often works with undocumented immigrants and transient residents, who either do not qualify for Medicaid or lack the proper paperwork to obtain it. Without the financial benefit of Medicaid reimbursement funds, the hospital will struggle to provide the same breadth of services while continuing to care for these uninsured populations.

“If we have no way of getting reimbursed for the care we’re delivering, that’s just not a sustainable business model,” she said. “If and when these cuts start to happen, rural hospitals will get hurt more than urban hospitals because we are not able to absorb the impact of such large cuts.”

Colorado was one of about 30 states that took advantage of the Medicaid expansion under the ACA. Hospitals and health care providers here now receive 100 percent federal reimbursement for the more than 250,000 new Medicaid patients who enrolled under the expansion plan. San Luis Valley Health, the health care system which oversees the medical center, saw Medicaid’s share of its payor mix increase from 21 to 33 percent since 2014. Its Medicaid enrollment has increased 70 percent over the same period.

“Our story is that persons who gained coverage [under the ACA], got on Medicaid. Very few of our clients moved to private insurance,” said Konnie Martin, the CEO of San Luis Valley Health, in February. “They just couldn’t afford it.”

That coverage increase, Martin said, meant the health system was able to achieve a small positive margin. She used the extra funds to replace important medical equipment that was outdated, often several years beyond its life expectancy. The center also raised its trauma level to support 24/7 surgery and orthopaedic coverage to the region, and added specialty services such as cardiology and oncology.

Martin said Medicaid expansion also has meant longer operating hours, shorter wait times and a reduction in overall health care costs. New Medicaid patients are able to see primary care physicians, which means they are more likely to receive preventative care to ward off more serious health problems. They’re also more likely to make appointments with their physicians rather than resorting to costly emergency room visits at any sign of sickness.

According to the Colorado Hospital Association’s Summer, Colorado has seen an 8 percent reduction in emergency room visits in the past few years. “The fear is of going back to an increase in emergency room use, which means patients don’t have primary care physicians,” he said. “Good health care needs to be at the right time and the right place, and both of those things are violated when people aren’t covered.”

Summer said that in the face of cuts like the ACA repeal would bring, health care centers in more urban areas might spread the burden: Nearby hospitals could choose to split up specialties like obstetrics and oncology. That’s simply not possible in Alamosa. “In [Martin’s] case, she doesn’t have anybody to turn to,” he said.

The importance of the San Luis Valley Health system extends beyond its role as a health care provider. It is a major employer in the region, providing more than $38 million worth of salaries and benefits each year. “We put a lot of people to work,” said Wehe. “So it’s an economic trickle-down effect if we have to start scaling back.”

Emily Bussey, a long-time Alamosa resident and an employee at San Luis Valley medical center, said job cuts would be devastating. “More people would be forced to leave and look for jobs elsewhere,” she said. A mother herself, Bussey said she couldn’t imagine having to travel so far to deliver her babies, and that “depending on the time of year, you probably don’t want to have to go through the mountains.”

Wehe admitted that the Affordable Care Act isn’t perfect. It “didn’t go far enough,” for example, in providing insurance coverage for people who are self-employed or who don’t qualify for tax credits, and reduced the number of insurance providers available in the state health exchange.

But she said it was an important step forward, particularly in getting more people to take control over their own health care. The Colorado Independent checked in with Wehe this week, who said that in recent years, patient numbers at the San Luis Valley Health Center have increased. More people are scheduling routine wellness visits and undertaking physical therapy. “I think people are just happy to have something,” she said of the expanded coverage under Medicaid.

The Senate’s proposal has her worried. “If people are just bouncing around on their insurance — they’re on it, they’re off of it, they’re on, they’re off—that’s just really not good for their continuity of care,” she said in a recent interview. For people who finally gained coverage under the ACA either through Medicaid or government tax credits, Wehe said, “The Senate bill just seems so unsustainable and so unfair.”

One of the biggest struggles in health care can be getting patients to be proactive, to see their doctors before they require emergency treatment. “I think we’re finally making it over that hump, people are starting to do that,” she said. “To suddenly have all of those things in jeopardy? It’s so confusing.”

Shannon Holman, a 27-year-old who lives about 40 minutes from Alamosa, told The Colorado Independent this week that she fears a repeal of the ACA.

“It’s very scary,” she said. Holman and her two children currently qualify for Medicaid, but she predicts that she will soon lose her coverage when she begins a new job, where she won’t qualify for company benefits until after at least a year.

Holman stays abreast of health care news by listening to the radio, but she said the Senate’s proposal is mired in uncertainty. She isn’t sure exactly how she’ll be affected: If she loses Medicaid, she thinks she will be able to get heath care coverage with her husband’s insurance, but said that coverage likely won’t be nearly as good as what she receives with Medicaid. She doesn’t think she’d be able to afford to buy insurance on the marketplace without significant government subsidies. And as someone with high blood pressure and hypertension, she said, good coverage matters.

Holman is used to taking care of herself. She grew up in foster homes, and said she “pretty much raised [her]self” since she was 16 years old. Without family support, it’s already “kind of terrifying” to know that she’s her own last resort.

For her, repealing and replacing Obamacare would mean not just a potential change in her own health insurance, but a significant cultural shift.

“I mean, it pretty much gives you a good wake up call, to realize you can’t really rely on anybody to help you,” she said.

Photo credit: Jeffrey Beall, via Wikimedia Commons

This is an update to a story originally published on Feb. 1