Becker's Hospital Review

13 CFO / FINANCE Medicaid cuts will trigger 'polycrisis,' Catholic health system leaders warn By Alan Condon L eaders from four of the nation's largest Catholic health systems — Ascension, Trinity Health, Providence and SSM Health — are sounding the alarm on proposed changes to Medicaid and the ACA marketplace, warning that the legislation would jeopardize access to care for millions of Americans and destabilize an already strained healthcare system. Together, the four health systems serve patients in 39 states and represent a significant portion of the country's healthcare safety net. During a May 20 media briefing hosted by the Catholic Health Association of the United States, executives outlined the human, operational and financial toll of the proposed cuts, calling on Congress to reconsider. "Among the most troubling aspects of the legislation are changes to work requirements, provider tax policy, state directed payments and retroactive coverage provisions," Sister Mary Haddad, president and CEO of the Catholic Health Association of the United States, said. "ese provisions could result in coverage losses for millions of people, creating new administrative barriers for families, providers and states." Providence: We are facing a "polycrisis" Erik Wexler, president and CEO of Renton, Wash.-based Providence, argues that U.S. healthcare is at an "inflection point" and faces a "polycrisis"driven by inflation, labor shortage, tariffs, but most concerning, the proposed Medicaid cuts being discussed on Capital Hill. "We have reduced an enormous amount of discretionary spend, which, when it was spent, seemed like the right thing to do. But it's just not an option any longer," Mr. Wexler said. "We have reduced our [full-time equivalents] significantly, and we are facing further labor reductions if these cuts go through. e concern is when those cuts happen and those FTEs are reduced, it resets healthcare in a way that affects the entire population." Medicaid cuts may appear to affect only a subset of the population, but the reality is far broader, according to Mr. Wexler. When programs and services become unsustainable and are forced to close, access to care diminishes for everyone — not just those on Medicaid. "at's why we've got to focus on this as an ecosystem that must be maintained, and not look at it in a partitioned way," he said. Providence operates in seven states and — with a Medicaid mix of about 30% — expects to take a $1 billion hit if the proposed Medicaid cuts are implemented. "at is a fairly catastrophic cut in a place where we are already not profitable," Mr. Wexler said. "We've been clawing our way back since the pandemic. While we've made progress, we still have negative margins and this will further create the pressures." Providence, a 51-hospital system, recorded an operating loss of $644 million (-2.1% margin) in 2024, compared to a $1.2 billion (-4.1% margin) loss in 2023. Trinity Health faces a $1.1 billion-dollar blow Livonia, Mich.-based Trinity Health warns that the proposed Medicaid cuts could cost the health system up to $1.1 billion across its 93 hospitals. "[Medicaid] is the coverage for at least 20% of those we serve, on average, with some of our communities exceeding 25% of our patients," Mike Slubowski, president and CEO of Trinity Health, said "And for our nursing homes and long-term care facilities, it is by far the predominant form of coverage." Even at current coverage and funding levels, Medicaid reimbursements fall short of Trinity's actual cost of care by more than $500 million a year — and that gap would only widen under the cuts currently being considered by Congress, according to Mr. Slubowski. "Our estimates suggest that we are at risk of operating losses exceeding $1 billion per year if a significant number of those we serve lose their healthcare coverage, combined with the proposed reductions in Medicaid payments," he said. To compound the problem, the Congressional Budget Office estimates that at least 7.6 million people will become uninsured and 10.3 million people would lose health coverage by 2034 if the bill in its current form becomes law. "Employers who provide health coverage to their employees realize that their healthcare costs are high because they, in effect, subsidize shortfalls providers incur serving Medicaid and Medicare patients," Mr. Slubowski said. "Further cuts to Medicaid funding will create more economic chaos because employers will not accept additional burdens for a government responsibility." Mr. Slubowski also pushed back on Republicans' claims of widespread Medicaid fraud, waste and abuse, and emphasized that administrative burdens like work requirements have proven inefficient and costly in states that have implemented them. "Let's be clear; we can't cut hundreds of billions from Medicaid without hurting people and weakening our communities," he said. "When people lose coverage, they skip checkups, they stop taking medications, and eventually show up in the ER, sicker and in need of more costly care that could have been prevented. at's not just bad for health; it strains hospitals, overcrowds emergency rooms and drives up costs for everyone — insured or not." Ascension: e burden will shi St. Louis-based Ascension, which serves communities in 16 states and Washington, D.C,, provided care to 6.1 million people in 2024. Nearly 750,000 of those patients were covered by Medicaid; 350,000 were either uninsured or self paid. "Of the roughly 75,000 babies that Ascension delivers annually, 41% were insured by Medicaid," Ascension President Eduardo Conrado said. "[Catholic health systems] like Ascension, Providence, Trinity Health and OSF [Healthcare] cover nearly 34% of the costs for Medicaid patients. Now, if you flip that for the uninsured or underinsured, we absorb roughly 88% of the costs to deliver care for those lives." If Medicaid enrollment is reduced, those individuals don't disappear

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