The University of South Alabama Health System may turn out to be the Mobile area’s biggest institutional beneficiary of the federal health care overhaul signed into law last month — not because of anything it will do differently, but because of what it has been doing for decades without being paid for it.
Carrying the load
USA has long provided the lion’s share of indigent care in the Mobile area. That burden grew heavier 23 years ago, when Providence Hospital relocated from its longtime home on Spring Hill Avenue at Catherine and Lafayette streets to Airport Boulevard in west Mobile, shifting a major hospital away from the neighborhoods where the uninsured are concentrated.
Since then, the university’s hospitals have absorbed the cost of treating patients who cannot pay — care delivered at considerable losses, year after year, and funded in practice by everyone else.
Under the new law, with insurance coverage broadened substantially, a significant share of those patients would arrive with a payer attached. USA stands to be compensated for care it has traditionally provided for free.
‘Many questions remain’
Just how much that will be worth is anyone’s guess at this stage. USA spokesman Keith Ayers said an actual figure will not be known for some time.
“We have traditionally provided the lion’s share of indigent care,” Ayers acknowledged. “At this point, we are awaiting the writing of regulations in the bill to determine the likely outcomes, but at this time it is hard to tell anything definitive. Certainly, receiving compensation for care provided is a move in the right direction, but many questions remain.”
That caution is warranted. Much of what the legislation actually does to hospital finances will be determined not by the statute itself but by the regulations that follow it — and by decisions made in Montgomery about how Alabama implements coverage expansions.
Why it matters locally
The stakes for Mobile go well beyond one institution’s balance sheet. USA operates the region’s teaching hospitals and its trauma center, and it trains physicians who then practice across south Alabama, from Baldwin County to Washington County. A health system that is chronically underpaid for the care it delivers is a health system with less capacity to invest in residency slots, equipment and emergency services that the entire region depends on.
Uncompensated care also shapes where hospitals choose to locate. Providence’s move west a generation ago was a business decision with lasting consequences for how emergency care is distributed in Mobile. If the economics of treating uninsured patients change, so may the calculations that drove that decision.
An uncertain political backdrop
The law arrives in an Alabama that is, politically, deeply hostile to it. Every Republican in Congress opposed it, along with a bloc of Democrats that included Alabama’s own Artur Davis, now running for governor. Attorneys general in several states have filed suit against the coverage mandate, and the state’s congressional delegation has promised to seek repeal.
None of that changes the underlying arithmetic at USA’s hospitals. Patients without insurance still show up. The bills still come. Whoever pays them, someone does.
For now, USA is doing what hospital administrators across the country are doing: reading the statute, waiting on the regulations, and running the numbers several different ways.