While GOP quislings like Tennessee Senator Lamar Alexander cobble together a plan to save the health care “reform” law they promised to repeal, and the Democrats demand a new stream of taxpayer money for insurance company bailouts, Obamacare is destroying the foundation of our medical delivery system. During 2016, twenty-one hospitals were forced to close. During the first two months of 2017, another five went under.
The facilities that you count on for major medical care are closing at a rate of two per month, and the pace of hospital closures has been steadily accelerating since Obamacare was launched. During 2010, the year the law was passed, only three hospitals closed. The following year, five shut down. During 2014 and 2015, the first two years of full Obamacare implementation, no fewer than 30 hospitals were forced to close their doors.
Why? Over half of U.S. hospitals lose money on patient care. Red ink was already a problem before “reform,” but it was greatly exacerbated when the Democrats perpetrated a bait-and-switch on the hospital industry with Obamacare. In 2009, industry representatives agreed to $155 billion in cuts to Medicare and Medicaid payment rates in exchange for a promise that PPACA would produce millions of newly insured patients.
Obamacare fell far short of its enrollment goals, of course. The Congressional Budget Office (CBO) initially estimated that exchange enrollment would reach 24.8 million in 2016 but has had to revise that figure dramatically downward because the projected stampede of enrollees failed to materialize. Enrollment during 2014 was in the ballpark, but afterward the projections proved more and more fanciful. As Josh Blackman put it:
CBO wrote that “more people are expected to respond to the new coverage options, so enrollment is projected to increase sharply in 2015 and 2016.” The surge never happened. In March 2016, CBO drastically downgraded its forecast by half to 10 million enrollees.
And a much larger than expected percentage of enrollees were simply dumped into Medicaid, which pays hospitals far below the cost (that’s cost, not charges) of treating patients covered by the program. Even worse, a study by Obamacare architect Jonathan Gruber strongly suggests that most of the “newly covered” Medicaid patients signed up under the “Affordable Care Act” were already eligible before the law passed.
In other words, the American Hospital Association (AHA) and other industry groups got punked by the Democrats and the Obama administration. The price of their stupidity is now being paid by hospitals across the country. Many hospitals already in fragile financial condition watched helplessly as Obamacare collaborators like the AHA gave the farm away in return for patients whose coverage doesn’t cover costs.
Consequently, most hospitals find themselves awash in red ink. And the ill effect of this is felt by patients in two ways: Those living in rural areas are increasingly forced to drive past shuttered facilities near their homes to metropolitan areas that can be an hour or two away. Those lucky enough to live near a suburban hospital may not have as far to drive, but the facility will have odd hybrid names like “Phoebe-Sumter Hospital.”
This is the result of what the Wall Street Journal dubbed “The Obamacare Effect: Hospital Monopolies.” These small suburban facilities have been forced to merge with large hospital systems to survive. If you live in Albany, Georgia, for example, every hospital within 50 miles from your home is operated by the same parent corporation. Albany is by no means unique and it’s obvious that Obamacare is driving the trend:
Since 2010, when there were 66 hospital mergers, the rate of hospital consolidation has increased by 70 percent.… The result of this wave has been a dramatic increase in concentration in the hospital market, with hospitals swallowing independent providers along with their personnel and becoming powerful regional monopolies.
One hardly needs to consult a Harvard economist to predict the effect this has on prices:
Hospital prices in monopoly markets are 15.3 percent higher than in markets with four or more hospitals. Hospitals in duopoly markets charge prices that are 6.4 percent higher.… In other words, increased concentration in health care ultimately victimizes consumers, as mergers allow hospitals to leverage their market position and drive up prices.
Obamacare is rendering free-standing community hospitals extinct. They are being forced out if business or into the arms of medical monopolies. If you live in a rural area, this is dangerous for your health. If you have a medical emergency and must be rushed to the ER, you will likely be driven past a defunct hospital to a distant facility where you will be treated by a hospital-employed doctor whom you have never met.
All of this assumes, of course, that you don’t suffer the same fate as your local hospital, that you survive the long drive to that out-of-town facility.