The new budget deal passed by lawmakers last week doesn’t restore funding to various government discretionary programs that support social services – such as healthcare programs for the homeless. And that’s likely to lead to higher healthcare spending and increased charity care at hospitals.
According to a recent report from NDD United, an alliance of more than 3,200 national, state and local organizations working to stop budget cuts to various government social services programs, federal funding for discretionary programs is severely restricted over the next decade as a result of budget caps and sequestration.
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By 2023, funding for discretionary programs will be cut by more than $2 trillion relative to the inflation-adjusted 2010 funding levels, the report said. Specifically, it’s estimated that 140,000 Housing Choice vouchers have been lost due to sequestration so far, prolonging homelessness and family instability, according to Morgan McDonald, MD, a physician at United Neighborhood Health Services in Nashville, Tenn.
McDonald explained that in addition to funding cuts for employment programs and affordable housing, there have also been numerous cuts to affordable daycare centers, working mom vouchers and mental health access.
The cuts to housing and employment programs may seem far removed from the healthcare industry, but there’s a trickle down effect.
“Many people were employed before and lost their jobs with the down economy or perhaps had a medical issue and lost their disability,” said McDonald. “You lose your insurance, then you lose your housing. Medical problems take over and it’s even harder to get a job, and medical problems are harder to deal with when you don’t have housing. Housing is really healthcare.”
The impact to healthcare – hospitals in particular – is the likelihood of increased charity care.
“It will put more pressure on hospitals,” said Bill Foley, managing director of consulting firm Huron Healthcare. Instead of going to a clinic or a primary care physician, patients without homes or who are in strained situations may end up in the emergency department. “Hospitals have a policy of treating everyone that comes through the door, whether they have insurance or not.”
Eastern Maine Healthcare Systems (EMHS), a rural healthcare system based in northern Maine, has experienced a recent increase in uncompensated care, according to Suzanne Spruce, chief communications officer at EMHS.
Spruce said it's difficult to pinpoint any one reason for the increase in uncompensated care, but undoubtedly some of it can be attributed to cuts in various government programs.
Since it is unlikely cuts to social services programs are going to go away, strong communication between social agencies and healthcare providers and care coordination among providers is critical to the health of these vulnerable patients and to managing healthcare costs, McDonald said.
“Having the technology to access health records across the city at different healthcare agencies ensures that medical tests aren’t being repeated or there aren’t problems with a patient’s medications,” she said. “Case management for the most vulnerable patients, especially in the mental health realm, is extremely important. There are high utilizers in the medical world, so to be able to have the resources to case manage these people can keep them out of the ED.