Hospitals Stall Hiring and Projects in Face of Policy Uncertainty

The potential for alterations to or repeal of the Affordable Care Act (ACA) have caused hospitals to preemptively act by postponing projects, delaying hiring, or limiting expansion in anticipation of changes, according to a report from Reuters.

Hospitals typically lay out long-term strategic plans that prioritize investments in projects such as new medical wings, clinics, and technology to attract new patients and build revenue.

Under the ACA, which provided coverage to 20 million new patients and subsequently brought more revenue to hospitals through an expended Federal entitlement program, hospital jobs increased by nearly 3 percent. That number has dropped off since the 2016 presidential election and the ensuing Republican-led efforts to replace the ACA. The growth in new hospital jobs also has slowed, per data from the U.S. Bureau of Labor Statistics. In January 2016, U.S. health-care systems added 11,558 new positions in January 2016, but that number has declined each month, to a low of 8,667 in February 2017.

According to the report, many health-care administrators are concerned about the future of Medicaid and other financial assistance programs for the poor and uninsured populations. The Republicans’ stalled American Health Care Act proposed undoing the ACA’s Medicaid expansion, capping federal payments to states, and using age-based credits.

Chief Financial Officer of the Denver Health Medical Center Peg Burnette noted that her health system has halted expanding its clinics since the November election. In 2016, it opened a $26.9 million clinic to provide care to a lower-income geographic area lacking health services and saw more patients within six months than it expected to see over two years. The health system planned to build or remodel five more facilities based on the new clinic’s success, but has now deferred $73.7 million in construction projects to serve low-income residents who were newly insured under the ACA.

“We want to know what will happen with the Medicaid expansion population, and what will be the timeline for that,” said Ms. Burnette. “Due to the uncertainty, we’re not going to issue new debt. We have no plans for that in the near future.”

Source: Reuters, March 23, 2017.