Calif. Hospitals Report Mixed Results Following ACA Implementation
California hospitals have reported mixed financial results since the implementation of the Affordable Care Act, but experts say it is too early determine the law's full effect on providers' earnings, U-T San Diego reports.
ACA's Effect on San Diego County Hospitals
Under the ACA's individual mandate and the Medi-Cal expansion, hospitals are treating more insured patients. Medi-Cal is California's Medicaid program.
However, hospitals' financial results have been mixed. For example, for the first six months of 2014:
- Sharp HealthCare and Tri-City Medical Center reported higher revenues, compared with the first six months of 2013; and
- Scripps Health and Palomar Health reported slightly lower revenues, compared with the same period last year.
Laurie Felland, associate director of health research at Mathematica Policy Research, said large health systems are performing better in the post-ACA health care industry.
Further, hospitals and health systems like Kaiser Permanente and Sharp that offer their own health insurance plans have an advantage over those -- such as Scripps -- that do not.
However, Palomar CFO Diane Hanson said the ACA is not the only factor in determining hospital performance.
ACA's Effect on Other California Health Systems
A Moody's Investors Service analysis last year projected that not-for-profit health systems would struggle financially.
However, many California not-for-profit systems have reported strong financial performances.
- Kaiser reported a 44% increase in profits during the first quarter of 2014; and
- Universal Health Services and LifePoint Hospitals both reported year-over-year profit increase for the second quarter.
Full Effect Remains To Be Seen
Experts note that some reimbursement cuts have not yet been fully implemented and could have an effect on hospitals' profits.
For example, funding cuts for hospitals that serve a disproportionate share of low-income residents have been delayed until 2016.
Felland said, "Even if hospitals are seeing the amount of uncompensated care they are providing drop, and their patient revenues increase, there is a lot of concern that we don't yet know what the full picture is."
Mike Murphy, CEO of Sharp, said, "Yes, we're getting more coverage, but people keep forgetting that we had our Medicare payments reduced," adding, "While we're getting dollars from people who were previously uninsured, we're also losing dollars on the reimbursement side" (Sisson, U-T San Diego, 11/7).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.