Health and Science

GOP health-care bill could have ‘fairly devastating effect’ on hospitals, Mt. Sinai CEO says

Pro: Hospitals will find themselves in 'very difficult circumstances'
Pro: Hospitals will find themselves in 'very difficult circumstances'

If the current Republicans' health-care bill becomes law, it could have a "fairly devastating effect" on the nation's hospitals, Mt. Sinai Health System CEO Dr. Kenneth Davis told CNBC on Monday.

"You're going to see a lot of the hospitals that take care of indigent populations, large Medicaid populations, have to close. You're going to see diminished services. You're going to see hospitals like ours, which are academic medical centers, find ways to cut other parts of our programs substantially," he said in an interview with "Closing Bell."

According to the Congressional Budget Office, 14 million more people would become uninsured next year if the American Health Care Act is signed into law.

By the year 2026, a total of 24 million more Americans would be uninsured than they would have been under Obamacare, the CBO said.

It also found the bill would reduce the federal deficit by $337 billion over the next decade.

President Donald Trump and Republican lawmakers have said replacing Obamacare is their first priority. Among other things, the GOP bill would eliminate the requirement that most Americans have health insurance and would drastically change the way Medicaid is funded.

One problem facing hospitals is that they lost the "disproportionate share payments," akin to a bad debt or charity pool, under the Affordable Care Act, Davis noted. That's because the assumption was bad debt would decrease once the number of people with insurance coverage increased.

Now there is the potential of 24 million people losing coverage, and there is nothing in the current legislation that would bring back those payments, he pointed out.

That means more patients "will come to our hospital uncompensated," said Davis.

The bill is currently making its way through Congress.

— CNBC's Dan Mangan contributed to this report.