Cuts in Hospital Subsidies Threaten Safety-Net Care

Stephen Morton for The New York Times

Donna Atkins has no insurance and went two years with what she thought was a sore throat. She recently had cancer surgery.

SAVANNAH, Ga. — The uninsured pour into Memorial Health hospital here: the waitress with cancer in her voice box who for two years assumed she just had a sore throat. The unemployed diabetic with a wound stretching the length of her shin. The construction worker who could no longer breathe on his own after weeks of untreated asthma attacks and had to be put on a respirator.

Many of these patients were expected to gain health coverage under the Affordable Care Act through a major expansion of Medicaid, the medical insurance program for the poor. But after the Supreme Court in 2012 gave states the right to opt out, Georgia, like about half the states, almost all of them Republican-led, refused to broaden the program.

Now, in a perverse twist, many of the poor people who rely on safety-net hospitals like Memorial will be doubly unlucky. A government subsidy, little known outside health policy circles but critical to the hospitals' survival, is being sharply reduced under the new health law.

The subsidy, which for years has helped defray the cost of uncompensated and undercompensated care, was cut substantially on the assumption that the hospitals would replace much of the lost income with payments for patients newly covered by Medicaid or private insurance. But now the hospitals in states like Georgia will get neither the new Medicaid patients nor most of the old subsidies, which many say are crucial to the mission of care for the poor.

"We were so thrilled when the law passed, but it has backfired," said Lindsay Caulfield, senior vice president for planning and marketing at Grady Health in Atlanta, the largest safety-net hospital in Georgia.

It is now facing the loss of nearly half of its roughly $100 million in annual subsidies known as disproportionate share hospital payments.

Memorial is also facing steep reductions in the subsidies. Cancer care may be among the services reduced, administrators here said. Memorial is now one of only a few hospitals in the state with a tumor clinic that accepts poor patients without insurance. Many show up coughing blood or having trouble breathing because their cancers have gone untreated for so long.

On a recent afternoon, Dr. Wade Fletcher, who practices at the hospital, thumbed through a stack of patient intake forms. The sections on payment contained the same refrain: No insurance. No money.

Even so, many of the patients work, often in Savannah's huge hotel and restaurant industry. Late last month, Donna Atkins, a waitress at a barbecue restaurant, learned from Dr. Guy Petruzzelli, a surgeon here, that she has throat cancer. She does not have insurance and had a sore throat for a year before going to a doctor. She was advised to get a specialized image of her neck, but it would have cost $2,300, more than she makes in a month.

"I didn't have the money even to walk in the door of that office," said Ms. Atkins, speaking in a low, throaty whisper.

Dr. Petruzzelli has a phrase for her situation: "She failed the wallet biopsy."

Ms. Atkins had surgery last Friday, two years after her first symptoms. It is unclear whether Ms. Atkins, whose income is right around the poverty line, will be left without Medicaid, or if she earns enough to qualify for subsidies to buy private insurance on the federal exchange. She appreciates the intent of the health law, but does not like the outcome: Her hours are being cut so her employer can count her as part-time to avoid having to offer insurance.

As she juggled takeout orders at the restaurant, Ms. Atkins said she would have to try to find a second job. "I'm 53," she said. "Not too many people want to hire someone my age."

Patients with chronic conditions like hers often go in and out of emergency rooms for years without treatment because doctors are only required to treat immediately life-threatening conditions. Dr. Christopher Senkowski, a surgeon at Memorial, recalled examining a farmer with pancreatic cancer that had spread throughout his body after months of referrals to specialists that he could not afford.

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