The Impact of the ACA's Medicaid Expansion on Hospitals' Uncompensated Care Burden and the Potential Effects of Repeal

ISSUE: By increasing health insurance coverage, the Affordable Care Act's Medicaid eligibility expansion was also expected to lessen the uncompensated care burden on hospitals. The expansion currently faces an uncertain future. GOAL: To compare the change in hospitals' uncompensated care burden in the 31 states (plus the District of Columbia) that chose to expand Medicaid to the changes in states that did not, and to estimate how these expenses would be affected by repeal or further expansion. METHODS: Analysis of uncompensated care data from Medicare Hospital Cost Reports from 2011 to 2015. FINDINGS AND CONCLUSIONS: Uncompensated care burdens fell sharply in expansion states between 2013 and 2015, from 3.9 percent to 2.3 percent of operating costs. Estimated savings across all hospitals in Medicaid expansion states totaled $6.2 billion. The largest reductions in uncompensated care were found for hospitals in expansion states that care for the highest proportion of low-income and uninsured patients. Legislation that scales back or eliminates Medicaid expansion is likely to expose these safety-net hospitals to large cost increases. Conversely, if the 19 states that chose not to expand Medicaid were to adopt expansion, their uncompensated care costs also would decrease by an estimated $6.2 billion.

Changes in Hospital Performance after Ownership Conversions

This paper examines the effects of ownership conversions on hospital performance between 1987 and 1998 in areas of financial performance, staffing, capacity, and unprofitable care. Conversions to government and for-profit ownership both increased the profit margin: the former due to rising revenue, and the latter due to reduced operating costs and rising revenue. Hospitals that converted to for-profit ownership had the greatest reduction in staffing relative to other converted hospitals. There was little change in bed capacity after conversion to for-profit status, but some reductions in bed capacity after conversion to government or nonprofit status. No conversion of any kind led to a reduced amount of unprofitable care, but conversion to private ownership (nonprofit and for-profit) increased the probability of trauma center closures.

Association Between the 2014 Medicaid Expansion and US Hospital Finances

IMPORTANCE

The Affordable Care Act expanded Medicaid eligibility for millions of low-income adults. The choice for states to expand Medicaid could affect the financial health of hospitals by decreasing the proportion of patient volume and unreimbursed expenses attributable to uninsured patients while increasing revenue from newly covered patients.

OBJECTIVE

To estimate the association between the Medicaid expansion in 2014 and hospital finances by assessing differences between hospitals in states that expanded Medicaid and in those states that did not expand Medicaid.

DESIGN AND SETTING

Observational study with analysis of data for nonfederal general medical or surgical hospitals in fiscal years 2011 through 2014, using data from the American Hospital Association Annual Survey and the Health Care Cost Report Information System from the US Centers for Medicare & Medicaid Services. Multivariable difference-in-difference regression analyses were used to compare states with Medicaid expansion with states without Medicaid expansion. Hospitals in states that expanded Medicaid eligibility before January 2014 were excluded.

EXPOSURES

Medicaid expansion in 2014, accounting for variation in fiscal year start dates.

MAIN OUTCOMES AND MEASURES

Hospital-reported information on uncompensated care, uncompensated care as a percentage of total hospital expenses, Medicaid revenue, Medicaid as a percentage of total revenue, operating margins, and excess margins.

RESULTS

The sample included between 1200 and 1400 hospitals per fiscal year in 19 states with Medicaid expansion and between 2200 and 2400 hospitals per fiscal year in 25 states without Medicaid expansion (with sample size varying depending on the outcome measured). Expansion of Medicaid was associated with a decline of $2.8 million (95% CI, -$4.1 to -$1.6 million; P < .001) in mean annual uncompensated care costs per hospital. Hospitals in states with Medicaid expansion experienced a $3.2 million increase (95% CI, $0.9 to $5.6 million; P = .008) in mean annual Medicaid revenue per hospital, relative to hospitals in states without Medicaid expansion. Medicaid expansion was also significantly associated with improved excess margins (1.1 percentage points [95% CI, 0.1 to 2.0 percentage points]; P = .04), but not improved operating margins (1.1 percentage points [95% CI, -0.1 to 2.3 percentage points]; P = .06).

CONCLUSIONS AND RELEVANCE

The hospitals located in the 19 states that implemented the Medicaid expansion had significantly increased Medicaid revenue, decreased uncompensated care costs, and improvements in profit margins compared with hospitals located in the 25 states that did not expand Medicaid. Further study is needed to assess longer-term implications of this policy change on hospitals' overall finances.

Funding, coverage, and access under Thailand's universal health insurance program: an update after ten years

BACKGROUND

In 2001, Thailand implemented a universal coverage program by expanding government-funded health coverage to uninsured citizens and limited their out-of-pocket payments to 30 Baht per encounter and, in 2006, eliminated out-of-pocket payments entirely. Prior research covering the early years of the program showed that the program effectively expanded coverage while a more recent paper of the early effects of the program found that improved access from the program led to a reduction in infant mortality.

OBJECTIVE

We expand and update previous analyses of the effects of the 30 Baht program on access and out-of-pocket payments.

DATA AND METHODS

We analyze national survey and governmental budgeting data through 2011 to examine trends in health care financing, coverage and access, including out-of-pocket payments.

RESULTS

By 2011, only 1.64 % of the population remained uninsured in Thailand (down from 2.61 % in 2009). While government funding increased 75 % between 2005 and 2010, budgetary requests by health care providers exceeded approved amounts in many years. The 30 Baht program beneficiaries paid zero out-of-pocket payments for both outpatient and inpatient care. Inpatient and outpatient contact rates across all insurance categories fell slightly over time.

CONCLUSIONS

Overall, the statistical results suggest that the program is continuing to achieve its goals after 10 years of operation. Insurance coverage is now virtually universal, access has been more or less maintained, government funding has continued to grow, though at rates below requested levels and 30 Baht patients are still guaranteed access to care with limited or no out-of-pocket costs. Important issues going forward are the ability of the government to sustain continued funding increases while minimizing cost sharing.

Free heart failure clinic aims to cut readmissions

Mountain State Health Alliance opened a free heart failure clinic after determining that patients' inability to get a timely follow-up appointment and financial issues were the cause of many readmissions. The clinic is in a convenient location, across the street from the hospital. The nurse practitioner who runs the program sees many of the patients while they are still in the hospital to inform them about the clinic. Interventions include help signing up for medication assistance, education for patients and family members, and ongoing support.

Not-for-profit hospitals' provision of community benefit: is there a trade-off between charity care and other benefits provided to the community?

BACKGROUND

For decades, not-for-profit hospitals have been required to provide community benefit in exchange for tax exemption. To fulfill this requirement, hospitals engage in a variety of activities ranging from free and reduced cost care provided to individual patients to services aimed at improving the health of the community at large. Limited financial resources may restrict hospitals' ability to provide the full range of community benefits and force them to engage in trade-offs.

OBJECTIVES

We analyzed the composition of not-for-profit hospitals' community benefit expenditures and explored whether hospitals traded off between charity care and spending on other community benefit activities.

METHODS

Data for this study came from Maryland hospitals' state-level community benefit reports for 2006-2010. Bivariate Spearman's rho correlation analysis was used to examine the relationships among various components of hospitals' community benefit activities.

RESULTS

We found no evidence of trade-offs between charity care and activities targeted at the health and well-being of the community at large. Consistently, hospitals that provided more charity care did not offset these expenditures by reducing their spending on other community benefit activities, including mission-driven health services, community health services, and health professions education.

CONCLUSIONS

Hospitals' decisions about how to allocate community benefit dollars are made in the context of broader community health needs and resources. Concerns that hospitals serving a disproportionate number of charity patients might provide fewer benefits to the community at large appear to be unfounded.

The right patient

This article offers professional opinions and advice on how physicians should prepare in order to protect themselves and their practices during this turbulent time in healthcare reform. This article presents real-life scenarios to help physicians understand what they may face and what actions they should take in anticipation of the future in healthcare. The article focuses on the concept of "the right patient," defining the characteristics of patients that benefit the financial aspect of a practice and those who do not. Its purpose is not to encourage physicians to deny care to patients who are poorly insured or uninsured, but to guide in the establishment of a smart and safe balance between the two. Strategies are discussed on how to attract the right patient and what these patients mean to the practice. The importance of practice marketing is also highlighted, along with an emphasis on the necessity of change in order to survive in the future healthcare environment.

Do hospital chief executive officers extract rents from Certificate of Need laws?

Prior research suggests that Certificate of Need (CON) laws reduce competition in the hospital services industry. As a result, this study empirically investigates if not-for-profit hospital chief executive officers (CEOs) are able to extract rents from CON laws in the form of higher compensation. A sample of 256 not-for-profit hospital CEOs in states with and without CON laws and data for 2007 are used in the empirical analysis. The study considers the endogenous nature of a CON law and allows such a law to indirectly affect CEO compensation through its impact on the number of hospitals and beds. The multiple regression results indicate that special and public interests both motivate the decision of a state to maintain a CON law. CON laws are shown to reduce the number of beds at the typical hospital by 12 percent, on average, and the number of hospitals per 100,000 persons by 48 percent. These reductions ultimately lead urban hospital CEOs in states with CON laws to extract economic rents of $91,000 annually.

The economic recession: early impacts on health care safety net providers

While the recession increased demands on the health care safety net as Americans lost jobs and health insurance, the impact on safety net providers has been mixed and less severe--at least initially--than expected in some cases, according to a new study of five metropolitan communities by the Center for Studying Health System Change (HSC). Even before the recession, many safety net providers reported treating more uninsured patients and facing tighter state and local funding. Federal expansion grants for community health centers during the past decade, however, have increased capacity at many health centers. And, programs to help direct people to primary care providers may have helped stem the expected surge in emergency department use by the uninsured during the downturn. Federal stimulus funding--the 2009 American Recovery and Reinvestment Act--has assisted hospitals and health centers in weathering the economic storm, helping to offset reductions in state, local and private funding. And, the economic downturn has generated some potential benefits, including lower rents and broader employee applicant pools. While safety net providers have adopted strategies to stay financially viable, many believe they have not yet felt the full impact of the deepest recession since the Great Depression.

It's all downhill from here. What started as a year of optimism has turned into what some describe as a supertough economic situation despite contrary reports

2007 is being seen as the financial high point for U.S. hospitals, with 2008 bringing a gloomy outlook. After record profits in 2007, this year is bringing layoffs and dwindling investment returns. "This is just the beginning. I think it's going to get worse before it gets better," says Leo Brideau, left, of the Columbia St. Mary's system in Milwaukee.