A new study from the Kaiser Family Foundation, undertaken prior to the Supreme Court decision, examines how five leading safety-net hospitals are preparing for major changes expected to result from the Affordable Care Act (ACA), including less government support for uncompensated care as more people become covered by Medicaid and private insurance, the need to compete for newly insured patients, and payment and delivery system reforms.

Safety net hospitals (SNHs) are a critical component of our nation’s health care system yet often struggle to meet the needs of their patients with available resources. This challenge has grown significantly over the past few years as the recent recession and its lingering effects have both increased the number of low-income and uninsured individuals seeking care while public funding for SNHs has decreased. Additionally, the changes made by SNHs in response to the prolonged economic downturn provide the foundation from which these facilities must now prepare for the changes that are being introduced under the Patient Protection and Affordable Care Act. This presentation by Sharon Long presents the findings from a study of the strategies five leading SNHs used to cope with the "Great Recession" and its aftermath, and their initial efforts to prepare for national health reform.

The ACA provides the opportunity to increase health insurance coverage for Californians through the expansion of Medi-Cal and the establishment of health insurance exchanges. After the law is fully implemented in 2014, it is estimated that 92 percent of Californians will be insured. Broader coverage will increase demand for health care services, as the newly insured seek care, often with greater unmet needs requiring more intense interventions. With this in mind, the ACA includes provisions to enhance the capacity of the delivery system to meet this heightened demand, so that increased coverage translates into access to high quality, culturally competent care. This is crucial in California, where health care is unevenly distributed across the state’s vast geography, shortages exist among many providers and Medi-Cal participation among providers is already inadequate.

Significant investments are made under the ACA to ensure the availability of primary, community-based care, including enhanced Medi-Cal payments for primary care, demonstration funds for institutions for mental diseases (IMDs), and resources to double community clinic capacity nationally. New initiatives also are established to support healthcare workforce planning and analysis, as well as training and education for a variety of health professionals. At the same time, however, the ACA reduces funding for uncompensated care provided by certain safety-net providers. Whether the level and timing of coverage gains will reduce hospital uncompensated care costs sufficiently to fully offset these reductions remains to be seen.

The report is structured to help state policymakers and stakeholders navigate the legislation and the challenges ahead, providing a summary of each of the key ACA access provisions along with the effective date; the entities responsible for implementation; the decisions, tasks and considerations facing California as implementation progresses; and “the bottom line.” As a further resource, the report includes charts outlining California’s health coverage and service programs and opportunities to support health care workforce development under the ACA. Please click here for the full report and accompanying charts available on the CHCF website.

This report is the second in a series of reports on which Manatt Health Solutions and the California HealthCare Foundation have collaborated. The initial report, published in June 2010, addresses health insurance coverage and the ACA provisions that aim to expand the availability of health insurance and to restructure the insurance market. Click here to read the June 2010 report.

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