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Duty Bound: The Fight Over Medicaid

States that deferred Medicaid expansion leave some community hospitals struggling. (Volume 9, Issue 17)

The success of the Affordable Care Act (ACA) continues to be challenged by its opponents, including president-elect Donald Trump. While concerns over the ACA Marketplace persist, a growing body of as well as improvements in access to health care.

Source: Kaiser Family Foundation

Since Medicaid expansion, the number of uninsured has dropped with .  This increase in insurance has been linked with improvements in access to health care, yet the effects on the financial health of hospital systems that compose the safety net is still under exploration.

Community hospitals located in impoverished locales are given the responsibility to provide medical care to patients that can neither access employment-based insurance nor qualify for federally-funded insurance. Though federal subsidies exist, community hospitals are often at the whim of their state and regional legislatures to determine how the burden of uncompensated care is shared with taxpayers. Many states leave community hospitals struggling to maintain financial viability which can affect patient safety and the quality of care provided.

States that expanded Medicaid showed a drop in uncompensated care up to 4.1 percentage points as compared to operating costs, a statistically significant trend that was not true for hospitals in Medicaid non-expansion states. Furthermore, projections show that states that deferred Medicaid expansion could benefit from a drop in uncompensated costs of 1.7 percentage points if they accept Medicaid expansion.

These findings have clear implications for the future of our healthcare system. Community hospitals continue to struggle to meet their responsibility to their patients. Shifting the financial burden of uncompensated care to the federal government distributes the burden more evenly, freeing up resources in impoverished communities to address other public health and medical crises. However, federal funding for Medicaid expansion will begin to wane in 2020 – provided the ACA survives the new president and Congress – leaving the 19 states that have yet to adopt Medicaid expansion a looming deadline.  State legislators must weigh their duty to their communities, including the health of their healthcare systems, against the political forces that continue to oppose healthcare reform.

commentary by Orlando Sola

Abstract

One pillar of the Affordable Care Act (ACA) was its expected impact on the growing burden of uncompensated care costs for the uninsured at hospitals. However, little is known about how this burden changed as a result of the ACA’s enactment. We examine how the Affordable Care Act (ACA)’s coverage expansions affected uncompensated care costs at a large, diverse sample of hospitals. We estimate that in states that expanded Medicaid under the ACA, uncompensated care costs decreased from 4.1 percentage points to 3.1 percentage points of operating costs. The reductions in Medicaid expansion states were larger at hospitals that had higher pre-ACA uncompensated care burdens and in markets where we predicted larger gains in coverage through expanded eligibility for Medicaid. Our estimates suggest that uncompensated care costs would have decreased from 5.7 percentage points to 4.0 percentage points of operating costs in nonexpansion states if they had expanded Medicaid. Thus, while the ACA decreased the variation in uncompensated care costs across hospitals within Medicaid expansion states, the difference between expansion and nonexpansion states increased substantially. Policy makers and researchers should consider how the shifting uncompensated care burden affects other hospital decisions as well as the distribution of supplemental public funding to hospitals. PMID: 27503973 

Dranove, D, et al. Health Affairs. 2016 August 1; 35 (8): 1471-9.

Orlando Sola, MD, MPH
About Orlando Sola, MD, MPH

Orlando Sola is an assistant clinical professor in the Department of Family Medicine at SUNY-Downstate Medical Center. He trained at the Institute for Family Health/Mount Sinai Hospital. He obtained his medical degree from Columbia University’s College of Physicians and Surgeons and completed his Masters in Public Health at Johns Hopkins Bloomberg School of Public Health. Contact: Website | Facebook | Twitter | More Posts