Los Angeles’s Health Department is conducting a high-speed and thorough review of its structure, processes, and the cost and delivery of services. In a little more than a year, most components of the Affordable Care Act will go into effect and could have major impacts on the second largest public health system in the country.
One of the first concerns facing the Department is the potential loss of the Disproportionate Share Hospital Funds. Nationally, the federal government spent $415 million in 2012, a figure that was expected to rise to $500 million in 2014. Instead, that money will be diverted to pay for other portions of the ACA. The difference is expected to be made up by the number of people who become insured and no longer rely on the public health networks.
But even increasing the number of insured residents can pose a threat to hospital and health districts, which will continue to face fixed costs regardless of the number of patients treated. In the 1990s, when thousands of previously uninsured people in Los Angeles moved onto Medicaid, the number of births at County run hospitals plummeted from 43,000 to just 3,000. That’s why the County is hoping to keep patients with their current doctors and providers, even if their insurance changes.
If volume of patients drops too drastically, without appropriate corrections to expenses or services, the health system could be forced to turn to the County for operational subsidies in the tens, if not hundreds, of millions each year.
Read the full story at the Los Angeles Daily News.