Hospitals See Greater Financial Benefits in Medicaid Expansion States
Hospitals in states that expanded Medicaid under the Affordable Care Act are experiencing significant financial benefits, according to an analysis released Wednesday by PricewaterhouseCoopers' Health Research Institute, CNBC reports (Mangan, CNBC, 9/3).
For the analysis, researchers analyzed data from five large, for-profit hospital systems -- Community Health Systems, HCA Holdings, LifePoint Hospitals, Tenet Healthcare and Universal Health Services -- that operate 538 hospitals across 35 states.
Benefits for Hospitals in Expansion States
Researchers found that the nation's three largest hospital systems -- Community Health Systems, HCA Holdings and Tenet Healthcare -- experienced a significant decline in admission rates of uninsured patients and experienced a significant increase in admission rates of Medicaid patients in expansion states during the first half of this year compared with the first half of 2013. Specifically:
- At CHS, admitted patients with Medicaid coverage increased by 10.4%, while self-pay patient admissions declined by 47.6%;
- At HCA, admitted patients with Medicaid coverage increased by 32%, while self-pay patient admissions declined by 48.0%; and
- At Tenet, admitted patients with Medicaid coverage increased by 20.5%, while self-pay patient admissions declined by 46.0%, resulting in a $78 million decline in uncompensated care (PwC analysis, 9/3).
In addition, each of the five hospital chains reported better-than-expected financial gains, according to the analysis (CNBC, 9/3). For example, CHS -- which operates in 12 expansion states -- said that the ACA increased its earnings by $40 million during the first half of 2014 and that it expects an additional $40 million in ACA-related earnings in the second half of this year. Meanwhile, LifePoint said the ACA increased its earnings by about $13 million (Baker, National Journal, 9/3).
PwC attributed the gains to "an influx of newly insured patients" in expansion states, which "has helped reverse long-running hospital trends such as declining admissions and a rise in uncompensated care" (Adams, CQ HealthBeat, 9/3).
The report also found that physicians in states that expanded Medicaid experienced similar results, with an increase in the percentage of Medicaid patients during the first three months of 2014 compared with physicians in non-expansion states.
Fewer Gains in Non-Expansion States
Meanwhile, PwC found that hospitals in states that did not expand Medicaid experienced little to no reduction in admissions of uninsured or self-paying patients and little to no increase in admissions of Medicaid patients.
For example, HCA hospitals admitted 48% less uninsured patients in expansion states, while HCA hospitals in non-expansion states admitted 2% less uninsured patients (CNBC, 9/3).
In total, PwC found that non-expansion states currently are forgoing $423 billion in federal Medicaid funds through 2022 by not expanding the program, and hospitals in such states are projected to miss out on $167 billion in Medicaid reimbursements over the same time frame (PwC analysis, 9/3).
PwC Health Research Institute Managing Director Ceci Connolly called the results "striking," adding, "Even though we expected this sort of distinction between the expansion states and the non-expansion, we did not expect it to be this significant and this fast" (CNBC, 9/3).
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