New Report: The Public Option Could Threaten Access to Care for Rural and Underserved Communities Already Facing Challenges

WASHINGTON – Today, a new report released by FTI Consulting and the Partnership for America’s Health Care Future examines how our current health care system would have responded if a new government-controlled health insurance system called the public option was implemented before this crisis. The report found the public option “would only exacerbate stresses on the health system. Instead of improving access to care and supporting health system capacity, the public option could instead leave many Americans worse off.”

Today, our nation’s hospitals are already strained and projected to lose $49.6 billion in revenue nationwide due to coverage changes. The public option could increase this loss by 60% to $79.2 billion, reducing access to quality care for tens of millions of Americans. This could lead to over half of all American hospitals operating with negative margins, increasing the risk of hospital closures and threatening access to quality care — especially for America’s rural and vulnerable communities. Consequently, hospitals serving rural and vulnerable patients could see their revenue loss increase by more than 40% from $14 billion today to $20 billion under a government-controlled health insurance system. 

While America’s health care leaders are working together to help Americans get healthy and stay healthy during this critical time, the public option’s financial impact could have significant consequences for patients and our nation’s preparedness efforts for the next crisis. The report notes “diminished margins would limit the resources available to expand intensive care units (ICUs), procure supplies and enhance staffing. Such measures are essential to containing the spread of disease in health care settings and ensuring access to high-quality critical care.”

Specifically, states deemed “hotspots” such as California, Texas, Florida, Georgia, and Arizona will experience significant financial consequences due to the current public health crisis, which would be worsened under the public option.  

Today, lost revenue from private coverage in these five states is estimated to range from $1.4 billion to nearly $11.6 billion. Under the public option, these losses would increase from between $1.8 billion to $15.6 billion in revenue —almost 34% — depriving state and local governments the necessary revenue needed to fund public health efforts to contain future outbreaks.

As a result, the response to the current crisis would be hampered under the public option as hospitals and providers face steeper revenue losses and would have fewer resources to prepare for surges of sick patients.

Key Findings:

• Implementation of the public option would threaten hospital services and their ability to remain operational during this crisis. 
• Already operating under razor-thin margins, the public option could increase revenue losses for hospitals in rural and underserved communities by more than 40% — threatening access to affordable, high-quality care. 
• Nationwide, America’s hospitals and health care providers could face a 60% increase in revenue loss, which would hurt the nation’s ability to respond to the next public health crisis. 
• States such as California, Texas, Florida, Georgia, and Arizona would experience significant financial consequences due to the current public health crisis under the public option scenario. State and local governments would be deprived of the necessary revenue needed to fund public health efforts to contain future outbreaks.

“As America’s health care leaders work together during this critical moment, this new report highlights the dangers of the public option and its impact on access to care for patients,” said Lauren Crawford Shaver, the Partnership’s executive director. “Now, more than ever, we should build on what’s working where private coverage, Medicare, and Medicaid work together to expand access to coverage and care for every American—not start over with a one-size-fits-all system.”

• To read the complete report from FTI Consulting, CLICK HERE.
• To learn more about the public option, CLICK HERE.
• To learn more about the Partnership for America’s Health Care Future, CLICK HERE.

About FTI Consulting: FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political and regulatory, reputational and transactional.  With more than 4,700 employees located in 28 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities.  For more information, visit www.fticonsulting.com and connect with us on Twitter (@FTIConsulting), Facebook and LinkedIn.

About the Partnership for America’s Health Care Future: The Partnership for America’s Health Care Future’s (PAHCF) mission is to build on what’s working in health care and fix what’s not. Every American deserves access to affordable health coverage and high-quality care.  Our health care system allows tens of millions of patients and families to receive world-class care delivered by world-class doctors and hospitals. But we can and must do more to ensure health care works for all Americans. That’s why the nation’s leading doctors, nurses, clinicians, community hospitals, health insurance providers and biopharmaceutical companies want to work together to lower costs, protect patient choice, expand access, improve quality and foster innovation. And whether it’s called Medicare for All, Medicare buy-in or the public option, one-size-fits-all health care will never allow us to achieve those goals. That’s why we support building on the strength of employer-provided health coverage and preserving Medicare, Medicaid and other proven solutions that hundreds of millions of Americans depend on – to expand access to affordable, high-quality coverage for every American.