Thursday, June 18, 2015

Why Hospitals in the States That Expanded Medicaid Are Suffering

The reduction in uncompensated care is not enough to overcome the increased volume of woefully low reimbursement rates. From Investor's Business Daily:
[T]urns out that hospitals in the expansion states aren't any better off than in states that didn't take the expansion bait. 
A Moody's report issued earlier this month found that hospitals in "Medicaid expansion states did not outperform hospitals in non-expansion states" when it comes to earnings. 
Yes, it found, hospitals in expansion states saw uncompensated care costs drop by 13%, but their operating revenues were no better than hospitals in non-expansion states. 
Why? Because Medicaid vastly underpays providers, and expansion states are seeing big increases in the number of Medicaid patients. 
One hospital in Illinois says it cut its unpaid bills by $9 million last year, but had $28 million in Medicaid costs, for which it got paid $14 million. So on balance, ObamaCare has left the hospital $5 million deeper in the hole. 
In Kentucky, which fully embraced ObamaCare and where three quarters of the newly insured are on Medicaid, the state's hospital association says the law has cost hospitals there $1 billion, resulting "in hospital staff layoffs" and threatening the "availability of hospital care, especially in rural areas." 
Meanwhile, several states that expanded Medicaid have seen enrollment rates much higher than expected. Just seven states saw 1.4 million more sign up for the government-run health program than they'd planned. 
In Kentucky, Medicaid enrollment was twice what the state had predicted, and in Illinois, more than 500,000 had signed up. The state estimated that 199,000 would. ...