The Affordable Care Act and Grady Hospital
Atlanta Metropolitan Market
The Atlanta Metropolitan market for healthcare services is dominated by nonprofit healthcare systems, including the academic medical system Emory Healthcare. Emory became the largest healthcare system in the market after its acquisition of St. Joseph’s Hospital of Atlanta. It is expected that the consolidation of healthcare systems will continue as healthcare reform and market forces make it difficult for smaller hospitals to remain independent. The 28 county Atlanta market has 43 acute-care hospitals with an estimated 459,909 inpatient discharges annually and 9,796 total acute-care beds. The average daily occupancy ...view middle of the document...
Grady Memorial Hospital provides a positive externality in the form of a public good. Grady offers care to indigent people who would be not be able to access care, and in many cases may be denied care. Grady Health System manages 600,000 patient visits per year, and the majority of Grady’s revenue is generated through Medicare and Medicaid reimbursement. In 2010 Grady provided $220 million in indigent and charity care. Grady Hospital is a necessary public good because of the specialized services they provide and the amount of indigent care they supply to the communities in which they serve (www.gradyhealthsystem.org). In addition to these services, Grady is also a valuable teaching hospital. Grady is an internationally recognized teaching hospital and they are exclusively staffed by doctors from Emory University and Morehouse schools of medicine. Twenty-five percent of doctors that practice in Georgia received some or all of their training at Grady (Gradyhealth.org).
Cost Benefit Analysis for Safety Net Hospital and Specialty Services
The cost to the taxpayers for having a safety net hospital that provides specialty services is higher taxes. Georgians have already seen an increase in their payroll taxes and their take-home salary has decreased in January 2013. After the implementation of the ACA it is expected that the amount of taxes people pay will continue to increase. Governor Nathan Deal rejected the Medicaid expansion. However, Governor Deal states that in Fiscal Years 2013 and 2014 Medicaid and SCHIP funding will be the second largest portion of the state funds budget; with 13 cents of every dollar going to one of these programs. Without Medicaid expansion the ACA is expected to add more than 100,000 new people to Georgia’s Medicaid Program. Georgians qualify for Medicaid under the current system but have not enrolled into the program. With the individual mandate requiring either insurance or a tax, people are likely to enroll in the current Medicaid system, this financial burden of enrolling this many people will fall on the state of Georgia and its taxpayers (Atlanta Journal Constitution, 2013).
The benefit for taxpayers to have a safety net hospital that provides specialty services is that it will provide a social benefit. People without insurance will still receive care, regardless of their ability to pay. They will also be able to seek treatment and immunizations. Therefore, this care will keep communities healthier. Grady also provides many specialty services to the 28 county service area; such as level 1 trauma center, burn center, and other specialty services that only Grady delivers.
The cost to providers will depend on the healthcare system and percentage of money they will get from the “bed tax”. The state charges hospitals 1.45% of net patient revenue to help pay for Medicaid. Trauma centers pay 1.4%. That money will allow the state to draw federal matching dollars. These dollars are redistributed to hospitals...