Baton Rouge Emergency Room Shows the Cost of Obamacare Fight

Updated on

A Baton Rouge hospital is closing the only emergency room on the city’s impoverished north side, a real-world ripple effect of the ideological clash over President Barack Obama’s health-care law.

The shutdown on April 1 serves as an early warning for hospitals in states such as Louisiana, where Republican Governor Bobby Jindal turned down federal money to expand the Medicaid program for the poor. Charity hospitals will lose billions of federal aid beginning late next year, a cut that was supposed to be offset as more residents were covered by Medicaid.

The combination is a looming “double whammy,” said Shawn Gremminger, a lobbyist for America’s Essential Hospitals in Washington, which represents those that care for the poor.

“It’s not survivable,” he said. “Hospitals are going to close.”

In Louisiana, Baton Rouge General’s Mid City hospital was already caught in that vise. It was flooded with the uninsured after a nearby charity hospital was closed. Louisiana provided a one-time injection of funds last year from the federal aid program that’s about to be cut. With that money gone, the hospital is closing the emergency room.

“It was unsustainable,” said Mark Slyter, the hospital’s chief executive officer.

While Republican governors in states including Indiana, Ohio and New Jersey have expanded their Medicaid programs under Obamacare, Jindal, a potential 2016 presidential candidate, has remained steadfast in his opposition.

Jindal’s Approach

A health-policy expert who began his political ascent as chief of Louisiana’s state hospital system in 1996, Jindal, 43, has said adding to the federal program would put almost half of Louisiana on government assistance. Jindal instead decided to turn management of the state’s charity hospitals over to private operators, a step his administration says has resulted in reduced wait times and better care at a lower cost.

“Instead of expanding Medicaid, we have chosen to improve health care and expand access for all Louisianans by transforming our state-run charity hospital system,” Shannon Bates Dirmann, a spokeswoman for Jindal, said in an e-mail.

In Baton Rouge, a city of 229,000, about one-fourth of whom live below the poverty line, the emergency room’s closing has been met with protests by residents and lawmakers who say Jindal’s policies are hurting the poor.

“The governor is putting ideology ahead of the welfare of the state,” said state Representative Alfred Williams, a Democrat from Baton Rouge. “He has an agenda and it’s to run for president of the United States. And if that causes the people of Louisiana to suffer, then I believe he’s OK with that.”

Building Pressure

Kathy Kliebert, the secretary of Louisiana’s Department of Health and Hospitals, said Mid City’s financial issues preceded the Medicaid decision and changes to the state hospital system. She said it was undermined by market forces as rival specialty hospitals lured away insured patients.

“Mid City has had financial problems for 10 years,” she said.

Nationally, the Patient Protection and Affordable Care Act of 2010 has eased the strain of caring for the uninsured. The law allowed for making Medicaid available to those earning as much as 138 percent of the poverty level, or about $16,200 for an individual. The expense is fully paid by the federal government through 2016 before being phased down to 90 percent.

Opting Out

After the U.S. Supreme Court in 2012 said it was up to states to decide whether to expand the program, the decisions initially broke down along party lines as Republicans questioned whether the federal government would keep its pledge to pay for it.

Ten of 28 states that have since decided to do so were led by Republicans. A new wave of the party’s governors in states including Tennessee, Wyoming and Utah tried to follow this year, though they have been stymied by lawmakers.

By January, 11.2 million more people were enrolled in Medicaid and its related program for children than during the three months that ended September 2013, before the provision took hold. In states that boosted the scope of Medicaid, uncompensated care costs dropped by $5 billion in 2014, twice as much as in those that didn’t, according to estimates released by the Obama administration.

In Louisiana, Obamacare would have added 242,000 to the program, according to the Kaiser Family Foundation, a Menlo Park, California-based nonprofit that tracks health-care policy.

Funding Cuts

Nationwide, charity hospitals are set to lose money from a Medicaid fund that partially offsets the cost of treating those who can’t pay.

Initially scheduled to kick in last year, the cuts were delayed by Congress until late 2016. The funding will decline by $35 billion during the following eight years, according to a 2014 analysis by researchers at Georgia State University in Atlanta and Tulane University in New Orleans. It’s not yet known how Louisiana will be affected, said Bates Dirmann, Jindal’s spokesperson.

Baton Rouge General’s Mid City hospital is a harbinger of the effect those reductions will have in states that didn’t expand Medicaid.

Mid City wasn’t the area’s safety-net hospital. It became one accidentally in 2013, when Jindal closed the nearby Earl K. Long Medical Center, which was part of a network of state teaching hospitals charged with caring for the poor.

When the Long hospital closed, Louisiana directed its patients and federal aid money to Our Lady of the Lake, a Catholic hospital in a wealthier, southern part of East Baton Rouge Parish.

Shorter Trip

Many of the poor showed up instead at the closer Mid City emergency room, which had to take them under federal law. Jerry Dean Johnson, 64, said Our Lady is at least 13 minutes farther from her home.

“It’s too far,” said Johnson, a Medicaid patient who has lung disease and has been rushed to Mid City twice in four months. “I think if I had to go way down there I would have died.”

Mid City’s uninsured patients rose by 400 a month, a 30 percent jump, said Slyter, its CEO. Psychiatric consultations rose almost 70 percent, also a spillover from the shuttered hospital, he said.

The state gave Mid City $23 million in one-time emergency funding in 2014 to keep the doors opened.

Expanded Medicaid would have relieved some of pressure on the emergency room, although it wouldn’t have saved an operation that was losing $2 million a month because of the uninsured, Slyter said.

“It would not have been a silver bullet,” he said. “But that’s one of several things that would have helped.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE