How States Can Break the Health Care Logjam

EMTALA, a massive federal unfunded mandate, has made the nation’s emergency rooms the default health care provider for the uninsured.

EMTALA, a massive federal unfunded mandate, has made the nation’s emergency rooms the default health care provider for the uninsured.

By Kelly McCutchen

In the pre-dawn hours of Sunday, January 22 a tornado, one of 40 over two days in Georgia, ripped through the tiny South Georgia town of Adel. Seven people died; the wounded were treated at the local hospital five minutes away.

Just three days earlier, that local hospital had announced it would close its emergency room – the only ER in Cook County – at the end of February. Cook Medical Center is hemorrhaging about $2.6 million a year, mostly due to the emergency room.

Tift Regional Medical Center plans to offer expanded hours at a non-emergency medical clinic in Adel while shifting emergency services to its hospital in Tifton, 24 miles away. Plans are in the works to build a replacement by 2018 in Adel for the 60-bed, acute care Cook Medical Center.

In rural Georgia and across the country, the uncertain future and closure of ERs and hospitals have become all too common. A primary factor is the long-term impact of the 1986 federal Emergency Medical Treatment and Labor Act (EMTALA). It requires hospital emergency departments to treat and stabilize all patients regardless of their ability to pay.

EMTALA, a massive federal unfunded mandate, has made the nation’s ERs the default health care provider for the uninsured.

In Cook County, nearly one resident in four is uninsured. The fact that 95 percent of the hospital’s ER visits were for minor medical care was key in management’s decision to close its emergency room.

How does this relate to the health care debate in Washington, D.C?

Federal waivers to states – based on principles in the proposed replacements to the Affordable Care Act – could provide immediate assistance to places like Adel. They could demonstrate under real-world conditions how to address fundamental challenges in health care in a fiscally responsible and economically rational manner.

The proposal being debated in Congress provides refundable tax credits (think of them as vouchers) for health care. The amounts vary by age, from $2,000 up to $4,000. For low-income individuals, whether this is enough to purchase insurance depends on whether Congress can repeal the expensive mandates and regulations that have raised insurance premiums.

For those still uninsured – by choice or by necessity – the local hospital ER will remain the default option. But there is a better solution: allowing the appropriated but unused funding for low-income individuals to support safety net providers.

This would eliminate EMTALA’s unfunded mandate and provide access to care for low-income, uninsured citizens. It would be a perfect feedback loop. If, on the off chance, no low-income individuals find coverage, 100 percent would fund safety net providers. If everyone finds coverage, no funds would flow directly to safety net providers.

For Georgia’s estimated 565,000 candidates, federal funding would amount to more than $1.4 billion. That’s just one-third of the cost of the ACA Medicaid expansion, and enough to cover the estimated $1.02 billion of uncompensated indigent care provided by Georgia’s hospitals, with nearly $400 million remaining to fund primary care and specialists.

For Adel, this would have fully funded the local hospital, kept the ER open and improved access to primary care. For Atlanta, 200 miles north, this could fund an innovative program at Grady Health System.

Grady’s model is based on safety net hospitals in Minneapolis and Cleveland, Ohio. With five local clinics as partners, Grady could fund its plan to provide comprehensive services to the 50,000 low-income, uninsured patients in its service area.

Everyone should agree that forcing hospitals to treat patients without payment is a demonstrably misguided policy. Everyone can agree, too, that improving access to primary care provides the best return on investment for taxpayer dollars.

To this end, the Georgia Public Policy Foundation is encouraging this state and others to negotiate federal waivers that fully fund the cost of caring for indigent patients. Such a move by several states would immediately assist struggling citizens and struggling health care providers, improve access to care for the poor, and lower the cost of care for consumers while empowering flexible, local solutions. By addressing what everyone agrees is one of health care’s fundamental problems, it should help those in Washington to find common ground.

Kelly McCutchen is President of the Georgia Public Policy Foundation, an independent, nonprofit think tank that proposes market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the view of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (March 17, 2017). Permission to reprint in whole or in part is hereby granted, provided the author and his affiliations are cited.