UMC faces millions in uncovered patient costs under federal reform

The Affordable Care Act will cost University Medical Center tens of millions over the next six years, hospital officials warned on Monday.

While the law, known as Obamacare, is designed to expand health insurance to everyone, it comes with a few catches for urban public hospitals such as UMC; it drastically reduces other forms of federal funding and doesn't expand insurance coverage to illegal immigrants, hospital CEO Brian Brannman told Clark County commissioners.

The result will be an estimated net loss of more than $52 million through 2019, he said.

"The ACA seems to leave the safety net hospitals out of the big picture," Commissioner Larry Brown said. "There's very little good news coming out of the potential impacts of this."

That's a significant amount of money for a public hospital tasked with taking care of the poor that hasn't posted a profit in more than a decade.

The hospital estimates that the rate of Nevada's uninsured will drop from 21 percent to 10 percent when the legislation is rolled out. The increase in insured patients will add an estimated $300 million in additional revenue for the hospital through 2019.

But the legislation will bring an increase in Medicaid patients. Medicaid often doesn't cover patient costs, so officials expect to lose tens of millions there.

The act will come with a reduction in federal funding for hospitals that treat a large share of indigent patients. The theory, according to federal lawmakers, is that with the expansion of health insurance, there will be fewer indigent patients, hence the lack of need for indigent funding.

The hospital will lose more than $100 million in funding because of the reductions.

On top of that, the Affordable Care Act doesn't do anything to help pay for illegal immigrants who don't have insurance. The hospital cares for anyone who shows up at its doors, regardless of whether they're legal residents of the United States.

That will cost the hospital millions more.

"I don't have a good solution for you with that population," Brannman told commissioners.

Commissioner Lawrence Weekly was critical of lawmakers who have been reluctant to come up with a solution to the issue.

"Nobody wants to have a conversation about the issue," he said. "It's too political for folks."

The report came a day before commissioners are expected to vote on a proposal that could chart a new future for UMC. Brannman, some commissioners and consultants hired by the county have advocated changing the hospital's governance.

Under the proposed model, oversight of the hospital will be turned over to a full-time board. Many public hospitals around the country have made the move, albeit with a reduction in public information about the hospital.

On Tuesday commissioners are scheduled to vote on whether to ask the Legislature for permission to make such a move. If state lawmakers approve it, commissioners will still have to vote again to make it reality.

Brannman said significant change is needed.

"We can't deliver health care the way we're doing it today," Brannman said.

Contact reporter Lawrence Mower at lmower@reviewjournal.com or 702-405-9781.