Local economy at risk with ACA repeal

Local economy at risk with ACA repeal2017-03-29T18:34:05+00:00


Steve Heath, Executive Director, CHN

Sacramento Business Journal                                                            March 9, 2017

As the seventh anniversary of the Affordable Care Act approaches and Congress debates the latest Republican proposal, Sacramento’s economy has a huge stake in the outcome; a $200 million stake.

Undeniably imperfect, the ACA (also called Obama Care) nevertheless changed the lives of multiple thousands of local residents for the better by giving them access to health care for the first time.

And it did something else that hasn’t gotten much attention, but is certainly worth noting as we debate what to do with it: It created jobs and contributed substantially to our area’s economic recovery.

For members of Capitol Health Network, the consortium of community-based clinical providers serving Sacramento and nearby communities, the ACA-generated Medi-Cal expansion drove huge change.

Patient volumes skyrocketed as 136,000 more county residents obtained Medi-Cal. Responding to the increased demand for service, our members hired staff. Their payrolls grew. So did our local economy.

They hired contractors to upgrade facilities and opened new care sites to make health care more accessible to a population that has transportation challenges. And our economy grew.

Today, if our members were combined into one company, it would have more than 1,500 employees and rank 20th on the Business Journal’s list of the region’s largest private employers.

Moreover, our members pay more than $72 million in salaries and benefits and spend another $48 million on everything from paper clips to tongue depressors, most of it locally.

That produces what economists call induced spending (the so-called “ripple effect”) of another $80 million and more than 500 non-health center jobs.

Put all that together and it comes to about 2,000 jobs and more than $200 million of economic impact. Annually. Locally.

In short, CHN’s members are not only a key component of the local health care system, serving more than 200,000 patients, but also a significant driver of the region’s economic engine.

That’s important to consider as we mark the seventh anniversary of Obama Care (March 23) while debating whether or how to scrap it.

Rolling back Medi-Cal to pre-ACA levels and reducing federal operating support by 70% would devastate most of our members and their patients.

Depending on the severity of the cuts, our members will need to cut services or close altogether. Jobs will be lost. Economic benefits will drop—by some estimates as much as a third to a half.

And that’s to say nothing of the impact on the rest of the health system if a large percentage of our 600,000 patient visits last year shift back to hospital emergency rooms because we can no longer serve.

All this should give pause to those who want to just blow up the ACA without having a rational replacement plan. It’s a scenario that applies to every community in the nation.

So, if anyone asks you to give them one good reason why Obama Care should not just be trashed, tell them you can think of 200 million good reasons why Washington needs to be cautious and thoughtful.