Medicaid expansion shapes hospital financial health

ccok-county-hospitalWe’ve all written a lot about the “Medicaid gap” – the low-income people who can’t get coverage under the Affordable Care Act because their states have opted out of Medicaid expansion. The Kaiser Family Foundation has estimated that 4 million people fall in this gap.

According to Moody’s Investors Service, nonprofit hospitals in expansion states have seen their bad debt from unpaid bills drop an average of 13 percent as they treated more patients who have coverage. In non-expansion states, bad debt rose.

Reuters’ Robin Respaut recently looked at how the Medicaid gap has affected two iconic urban safety net hospitals who treat a lot of low income people – Cook County in Chicago and Grady Memorial in Atlanta.

Illinois expanded Medicaid – and Cook County Health and Hospitals System had its first profit in 180 years.

In the pre-ACA era, about half of Cook’s patients were uninsured. But about half the 330,000 people in Cook’s service area who were eligible for Medicaid expansion enrolled after the Act was passed. For the first time ever, a majority of Cook’s patients had health coverage. And many of those with chronic diseases, who frequently used to end up in the E.R., are now being managed by their own physicians.

“This has been a sea change for us,” John Jay Shannon, M.D., Cook County Health’s chief executive, told Respaut:

In the fiscal year ending in November 2014, uncompensated charity care dropped to $342 million from $500 million the year before. Funding from Medicaid nearly doubled the health system’s operating revenues, a major reason that, after ending 2013 with a net loss of $67.6 million, Cook County Health finished its most recent fiscal year in the black.

The hospital has a new problem: making sure it keeps its patients. With Medicaid, they can go where they want. They have choices other than Cook.

“A world of improved access is also a world of choice.” Shannon said.

Grady Hospital in Atlanta

Photo” Bill Ruhsam via Flickr

At Grady, not much has changed. Before the ACA, about one-third of the patients were uninsured. The number with some kind of insurance increased by less than 2 percent last year, and Medicaid coverage barely budged. Bad debt kept climbing – rising from $269 million in 2013 to $396 million last year.

“We’ve seen no difference from the Affordable Care Act,” John Haupert, Grady’s chief executive, said for the Reuters story. Patients are still coming, seeking charity care.

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  1. Pingback: Hospital companies see fewer unpaid bills under ACA | Association of Health Care Journalists

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