Hospitals report on the Medicaid Expansion

by The Incidental Economist on May 13, 2014 · 3 comments

I’ve written many times before about the differences in states that have accepted and denied the Medicaid expansion. Those that have expanded the program will see millions fewer uninsured. They will see their Medicaid spending go up more slowly in the future.

Now, we can also see that hospitals in those states are seeing real differences in their patient populations as well.

One of the real concerns in states that don’t expand Medicaid is that hospital and hospital systems in those areas might suffer. One of the understandings of the ACA was that the number of uninsured should be going down significantly in the future. Therefore, disproportionate hospital share payments, which have, in the past, been directed to cover uncompensated care, were expected to go down over time.

But in states that have refused the expansion, the numbers of uninsured are remaining high. Levels of uncompensated care are still high. Hospitals are still covering this care, but might not be reimbursed for it.

Thanks to Jason Millman at the Washington Post, we now have some numbers on this issue:

The Hospital Corporation of America, which has facilities in 20 states, reported a big gap in Medicaid and uninsured admissions between expansion and non-expansion states. In the four states it operates where Medicaid expanded under the ACA, the company saw a 22.3 percent growth in Medicaid admissions, compared to a 1.3 percent decline in non-expansion states. The company also had a 29 percent decline in uninsured admissions in the expansion states, while non-expansion states experienced 5.9 percent growth in uninsured admissions, chief financial officer William Rutherford said.

The proportion of Medicaid-covered patients seen at HCA facilities went up 22% in states that expanded Medicaid, and down 1% in states that didn’t. Since Medicaid reimburses on the low end, some might think this is good. But hospitals in states that expanded Medicaid also saw a decrease in their uninsured patients by 29%, versus a 6% increase in uninsured patients in states that did not.

It’s not just HCA, either. Community Health Systems, operating in 29 states, saw uninsured emergency visits decrease 16% in expansion states, but increase 4% in non-expansion states. Tenet Healthcare saw Medicaid visits increase by 17% and uninsured visits decrease by 33% in expansion states, while Medicaid visits dropped by 1% and uninsured visits increased by 2% in non-expansion states.

This kind of thing shouldn’t be minimized. There’s a reason pretty much every health system in the country has supported the Medicaid expansion. It’s because they know they will wind up caring for many people, whether they have no insurance or Medicaid. Medicaid may under-reimburse, but something is better than nothing. Hospitals that see Medicaid patients will likely see more reimbursement that hospitals caring for the uninsured.

Given that many hospitals are already hurting from the recent slowdown in health care spending, they’re not eager to see more uncompensated care. They’re worried about what continued drains on their finances might mean for the future. States that continue to oppose the Medicaid expansion should keep this in mind.

Aaron

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