By Jonathan Shorman, June 29, 2016
The lack of Medicaid expansion in Kansas played a “big” role in the decision to sell St. Francis Health, the hospital’s president said Wednesday, detailing how the organization faces financial pressure over the state’s unwillingness to increase program eligibility.
The hospital forgoes up to $10 million in revenue each year because of non-expansion, David Setchel said. Owner SCL Health put the central Topeka hospital up for sale in May.
“I’m not going to say failure to expand Medicaid is the sole reason why — it’s a big reason why,” Setchel said.
SCL Health owns hospitals in multiple states, but its Topeka hospital is its only facility to operate in a state that hasn’t expanded Medicaid, Setchel said. He decried the economic harm done to hospitals and the consequences for individuals when expansion hasn’t taken place.
“When you lack that kind of reimbursement in a hospital setting and you’re taking care of folks for free in a hospital setting, one of the things you have to do is you have to tighten down your expenses, and part of that means you’re reducing your employees’ hours from time to time,” Setchel said.
“That creates an economic impact for your associates and your families.”
The lack of expansion also pushes cost increases onto insured customers and their providers, Setchel said. He made the remarks at a forum promoting expansion of KanCare, the state’s privatized Medicaid program.
“It’s the perfect storm, and it’s causing lots of issues,” Setchel said.
When SCL Health announced the sale, it cited the lack of Medicaid expansion, as well as challenges stemming from health care reform, as contributing factors in the decision to sell the 378-bed hospital. The faith-based nonprofit has said it is seeking a buyer who will support the hospital’s local leadership in a state that hasn’t expanded Medicaid.
Speaking at the same forum, Curtis Sneden, a lobbyist for the Greater Topeka Chamber of Commerce, which supports expansion, spoke of it in economic terms. The health care sector in Shawnee County makes up an “enormous” part of the economy, he said.
“Because we are a regional health care center, the impact of the health care industry on our economy is much more pronounced here than it is as a percentage in the state or even the nation as a whole,” Sneden said.
The forum, organized by the Alliance for a Healthy Kansas, was just one of a number of events across the state that aim to turn the tide toward expansion in Kansas. GOP legislative leaders have largely prevented debate and votes over expansion proposals, with some representatives ousted from committee posts.
More than 30 states have expanded Medicaid. When a state expands to offer Medicaid to up to 138 percent of the federal poverty level, the federal government pays a majority of the cost.
Gov. Sam Brownback and his administration say the case for expansion doesn’t add up. Expansion — which could add more than 150,000 people onto Medicaid in the state — would be a new entitlement for able-bodied adults without dependents, Brownback argues.
The administration has argued expansion would prioritize those who choose not to work before people who are intellectually or physically disabled, as well as people who are frail, elderly or mentally ill.
“This isn’t just bad policy, this is morally reprehensible,” Brownback spokeswoman Melika Willoughby wrote in a dispatch to the governor’s supporters last fall.
Advocates for expansion have rejected Brownback’s argument as a false choice. The Big Tent Coalition, an umbrella group made up of organizations that represent people with disabilities, has said people with disabilities would benefit from Medicaid expansion.