(RNN) - One of the many growing pains related to the Affordable Care Act could be the effect on hospitals whose focus is treating low-income patients and those without insurance.
The majority of healthcare facilities in the United States - more than 3,500 - receive tax-exempt status because they are public institutions that spend a specified percentage of their revenue on people who cannot pay for healthcare; or they were created as charitable arms of religious organizations.
Federally mandated healthcare for all citizens means that pool gets shallower, making it more difficult for a hospital to claim a sizable portion of its operating expenses that goes toward "charitable healthcare."
The goal is to ease the government's financial burden by replacing federal subsidies with more payouts from health insurance companies.
However, the process of selecting providers under the new law is raising concerns.
A recent New York Times report found insurance companies in many states were passing over a large amount of hospitals, especially those that primarily provide care for poor and chronically ill people.
Insurers say a narrower selection of providers helps keep costs down for consumers, something health experts have debated.
"Children's hospitals, research and teaching institutions - they tend to be more expensive," said Jim Kaufman, vice president of policy for the Children's Hospital Association. "If an insurance company is looking mainly at cost, that's a major concern for us."
Another tradeoff to a limited amount of healthcare providers is that patients could have to travel a greater distance for treatment.
The Health Research Institute of PricewaterhouseCoopers released a study that said "the use of narrow networks may also lead to higher out-of-pocket expenses, especially if a patient has a complex medical problem that's being treated at a hospital that has been excluded from their health plan."
Some of the most glaring examples of insurers excluding major medical centers, the study said, were in California, Illinois, Indiana, Kentucky and Tennessee.
Blue Cross Blue Shield in Tennessee created a new network that would not pay for treatment at several hospitals in the state, including world-renowned Vanderbilt University Medical Center, according to TV station WSMV.
But what about the kids?
An unintended consequence of the Affordable Healthcare Act could be its effect on medical care for children.
There will not be many young people enrolled in state healthcare exchanges because the majority of them are already eligible for coverage through Medicaid or the Children's Health Insurance Program (CHIP).
But that could change sooner rather than later.
States have the option to cover more children through Medicaid expansion, but nearly half are either opposed or on the fence about the issue.
Funding for the CHIP program ends this year, and if it is not reauthorized, those children could get rolled into healthcare exchanges.
There is one major problem with that - the exchanges are not child-friendly.
According to Kaufman, the benefits packages focus more on wellness and prevention than things like habilitative care. Habilitation - as opposed to rehabilitation - teaches functional motor skills to children at a later stage in life. They may never have had those skills early on because of what their disabilities prevented them from doing.
"Children continue to grow, so some things need to be modified," Kaufman said. "Healthcare is very, very complex. I don't think it's intentional. People focus on what they know and understand, so it's focused on adults."
Even in the current system, many children covered by Medicaid have a hard time receiving healthcare because of the number of providers that do not accept that form of insurance.
Expanding the program does no good if hospitals and doctors are not included in networks or if they never accepted Medicaid in the first place.
"We'll be the first to tell you there are a lot of great things about our healthcare system, but there are also a lot of things that need improvement," Kaufman said. "Is it going to solve the federal deficit? No. But it will improve care coordination for families and help save some costs."
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Health provider networks under the Affordable Care Act could exclude some of the best hospitals in the country. (Source: Broder Medicine)
