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Sitka CEO: Affordable Care Act will close gap in charity care

The Affordable Care Act will mean big changes for the way health care is paid for across the country. In Alaska, smaller hospitals typically have had to make up the difference themselves between patients who have insurance or who can pay, and those who simply can’t afford to pay anything.

In Sitka, the local hospital has already topped $800,000 in uncompensated services this year, with local tax payers footing the bill. For Sitka Community Hospital, the Affordable Care Act is expected to help plug this gap.


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Most of the attention focused on the Patient Protection and Affordable Care Act since its merits were argued before the Supreme Court this spring has been about the so-called individual mandate: the requirement that everyone have some form of insurance.

Opponents of the law considered the individual mandate to be its biggest constitutional flaw, but the mandate survived the high court’s scrutiny. Sitka Community Hospital CEO Hugh Hallgren says there is a big upside.

“The passage of this act is going to allow many, many more people – families and individuals – to have health insurance, or health care coverage, available to them. For the first time perhaps, or at greatly reduced rates than had been available to them in the past.”

The Act allows parents to keep their children on their employer-sponsored policies until age 26. Those who don’t have coverage at work will be able to buy policies at the same rate as everyone else in their age group and geographic location, without regard for most pre-existing conditions.

This is the barest sketch of what the Affordable Act does. It is wide-sweeping, and could have been struck down for any number of reasons. As a rural hospital administrator, Hallgren is outcome-oriented.

“The fact that the law was upheld means that members of our community will be able to afford their health care and are likely to get it in a timely fashion, which means their health will improve, and that’s why Sitka Community Hospital is here, to help improve the health and welfare of the community.”

Sitka Community Hospital – like all publicly funded hospitals – will turn away no one based on the ability to pay. The hospital’s annual budget is about $22-million. In the past eleven months, they’ve given away over $800,000 in care to patients who cannot pay – almost twice as much so-called charity care as the hospital expected to provide this year.

Hallgren does not expect the Act to end this problem. There will be gaps: people will be between jobs, or forget to submit the right form, or whatever.

“No, I don’t anticipate that charity care will ever go away completely, but I think the growth in charity care will go away.”

The Act also expands the social safety net, which, along with the individual mandate, will be a major source of conservative antipathy toward the legislation, and will fuel efforts to try and win its repeal. Advocates could argue that the personal mandate began as a conservative idea – Governor Mitt Romney brought the individual mandate to Massachusettes, after all – Hallgren sees that there is a trade-off.

“This will cost taxpayers more money – in addition to this individual mandate – but at the same time, it will level the playing field in terms of how accessible health care is to everyone.”

The Act expands Medicaid eligibility to all individuals and families with incomes up to 133-percent of the poverty level. In Alaska, that means a family of four with household income below $38,000 will be covered by Medicaid.

That will cost taxpayers, obviously. But in Sitka, local taxpayers are already subsidizing free care at the hospital at a rate that is nearing $1-million per year. Will we come out ahead with the Affordable Care Act? Hugh Hallgren knows that Congress could repeal all or part of the Act sometime in the future. But right now, he considers it a win.

“We’re not going to go to sleep on this, and we’re certainly as interested as everyone else, but I think that overall this is very good news for our community.”

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