EDITORIAL: UMC another victim of Obamacare

Friday’s announcement that University Medical Center had eliminated more than 100 positions, including some nursing jobs, wasn’t all that surprising. The region’s only public hospital has lost hundreds of millions of dollars in recent years, receiving public bailout after public bailout. Operating deficits are projected to continue well into the future, so the hospital had to cut payroll and shut down money-draining operations to ensure the system’s survival.

What was surprising about the cutbacks, however, was one of the stated reasons for them: the implementation of the Patient Protection and Affordable Care Act.

Obamacare was supposed to bring more paying patients into hospitals and doctor offices and, theoretically, reduce uncompensated care and cost shifting. But in Nevada, the vast majority of Obamacare enrollees are Medicaid patients. And Medicaid reimbursement rates are so low that hospitals and doctors are guaranteed to lose money on every patient.

Although UMC has long been the valley’s health care provider of last resort, the destination of choice for the uninsured and the indigent, those covered by Medicaid are free to seek care elsewhere. Thus, there’s less need for UMC to keep open underperforming clinics. The Quick Care centers on Boulder Highway and in Laughlin will close. Other Quick Care centers, which treat more insured patients, or private doctor offices can take on the losses of treating Medicaid patients.

So UMC still loses money, but loses less.

“With the Affordable Care Act, patients that we had developed programs for basically now have other options, and there is no way we can justify keeping open Quick Cares that are losing millions of dollars,” UMC Chief Executive Officer Lawrence Barnard said Friday.

But those actions won’t stop all the short-term bleeding. As reported last week by the Review-Journal’s Paul Harasim and Ben Botkin, Obamacare has created such a dramatic, immediate cash-flow problem for UMC that Clark County commissioners recently approved millions of dollars in loans to deal with “delays in the amount of future cash receipts associated with Medicaid claims and insured patient claims.” Nevada has a backlog of about 50,000 Medicaid applications. Patients are being admitted and treated, but no money is coming in.

On top of these complications, Obamacare has not significantly reduced the number of uninsured. The government foolishly believed that Americans could be coerced into buying high-deductible, low-quality insurance they can’t afford. But most of the uninsured population isn’t buying. So UMC will continue to see a large number of uninsured patients with no ability to pay — including undocumented immigrants who aren’t supposed to be eligible for Medicaid or Obamacare subsidies.

Give UMC and the county credit for taking steps to improve the hospital system’s operations and reduce the financial losses. A new governing board is getting up to speed. Many workers affected by last week’s cuts are expected to be moved into existing vacant positions. Southern Nevada needs a viable UMC.

But Obamacare has, without question, created new difficulties for a hospital with no shortage of them. Congress can’t afford to let Obamacare, of all laws, deliver the coup de grace to UMC and other struggling public medical centers. Repeal Obamacare and start over on health care reform.