Nav: Home

Medicaid expansion associated with increased Medicaid revenue, decreased uncompensated care costs

October 11, 2016

In a study appearing in the October 11 issue of JAMA, Fredric Blavin, Ph.D., of The Urban Institute, Washington, D.C., estimated the association between Medicaid expansion in 2014 and hospital finances by assessing differences between hospitals in states that expanded Medicaid and in states that did not expand Medicaid.

The Affordable Care Act expanded Medicaid eligibility for millions of low-income adults. The choice for states to expand Medicaid could affect the financial health of hospitals by decreasing the proportion of patient volume and unreimbursed expenses attributable to uninsured patients while increasing revenue from newly covered patients. However, whether Medicaid expansion has been associated with improved hospital profits is uncertain, particularly for hospitals that received generous support from state or local government for providing uncompensated care.

This study included data from the American Hospital Association Annual Survey and the Health Care Cost Report Information System from the U.S. Centers for Medicare & Medicaid Services for nonfederal general medical or surgical hospitals in fiscal years 2011 through 2014. The sample included between 1,200 and 1,400 hospitals per fiscal year in 19 states that expanded Medicaid in early 2014 and between 2,200 and 2,400 hospitals per fiscal year in 25 states that did not expand Medicaid (with sample size varying depending on the outcome measured).

Expansion of Medicaid was associated with a decline of $2.8 million in average annual uncompensated care costs per hospital. In addition, hospitals in states with Medicaid expansion experienced a $3.2 million increase in average annual Medicaid revenue per hospital, relative to hospitals in states without Medicaid expansion. Medicaid expansion was also significantly associated with improved excess margins (a profitability indicator that includes all other sources of income, not just those from patient care) (1.1 percentage points), but not improved operating margins.

"For states still considering Medicaid expansion, these findings suggest that expansion may be associated with improvements in hospitals' payer mix and overall financial outlook. However, changes in financial outcomes for hospitals in any specific state will likely depend on a host of factors, such as the state's pre-ACA income and coverage distribution, Medicaid eligibility thresholds, Medicaid reimbursement levels, and the subsidies hospitals receive for providing uncompensated care," the author writes.

"Further study is needed to assess longer-term implications of this policy change on hospitals' overall finances."
-end-
(doi:10.1001/jama.2016.14765; the study is available pre-embargo to the media at the For the Media website)

Editor's Note: This study was supported by the Robert Wood Johnson Foundation. The author has completed and submitted the ICMJE Form for Disclosure of Potential Conflicts of Interest and none were reported.

To place an electronic embedded link to this study in your story This link will be live at the embargo time: http://jama.jamanetwork.com/article.aspx?doi=10.1001/jama.2016.14765

The JAMA Network Journals

Related Medicaid Articles:

Kidney transplants covered by Medicaid increased in states after Medicaid expansion
Medicaid expansion has helped more young, low-income adults with advanced kidney disease to avoid the costs and poor quality-of-life associated with dialysis, reports a study from researchers at Drexel University College of Medicine and the Dornsife School of Public Health at Drexel.
Repeat ER users changed how they used ERs after gaining medicaid coverage
A new study sought to determine how the nature of visits to emergency departments (EDs) changed for previously uninsured patients who gained Medicaid insurance expansion under the ACA and who went to the ED at least once before and once after expansion.
How was Medicaid expansion associated with rates of child maltreatment?
State-level data were analyzed to determine whether Medicaid expansion was associated with changes in rates of physical abuse and neglect of children younger than 6.
Medicaid expansion associated with fewer cardiovascular deaths
Expanding Medicaid eligibility was associated with lower rates of death from cardiovascular causes in a study comparing data from counties in 29 states that expanded Medicaid with 19 states that didn't from 2010 to 2016.
First states to expand Medicaid saw larger screening rate increases
The five states and District of Columbia that first adopted Medicaid expansion saw larger increases in cancer screening than those states that did not.
Medicaid could save $2.6 billion within a year if just 1% of recipients quit smoking
Reducing smoking, and its associated health effects, among Medicaid recipients in each state by just 1 percent would result in $2.6 billion in total Medicaid savings the following year, according to new research by UC San Francisco.
Are the uninsured and medicaid patients more likely to be transferred to another hospital?
This study analyzed 215,000 emergency department (ED) visits to 160 US hospitals to see if patients with the common conditions of pneumonia, chronic obstructive pulmonary disease (COPD) or asthma were more likely to be discharged from the ED or transferred to another hospital after being stabilized based on their insurance status.
WVU researcher finds some Medicaid populations more likely to die by suicide
A West Virginia University researcher has discovered the suicide rate of some Medicaid-insured youth -- including girls and young women -- is higher than those with private insurance.
What does expanded Medicaid mean for the health & work lives of enrollees? A lot
A new study could help states that will soon expand Medicaid, or may add a work requirement, understand what might be in store.
Pre-pregnancy health coverage climbs after Medicaid expansion
The number of low-income women enrolled in Medicaid before becoming pregnant rose substantially in states that expanded Medicaid eligibility through the Affordable Care Act.
More Medicaid News and Medicaid Current Events

Best Science Podcasts 2019

We have hand picked the best science podcasts for 2019. Sit back and enjoy new science podcasts updated daily from your favorite science news services and scientists.
Now Playing: TED Radio Hour

Rethinking Anger
Anger is universal and complex: it can be quiet, festering, justified, vengeful, and destructive. This hour, TED speakers explore the many sides of anger, why we need it, and who's allowed to feel it. Guests include psychologists Ryan Martin and Russell Kolts, writer Soraya Chemaly, former talk radio host Lisa Fritsch, and business professor Dan Moshavi.
Now Playing: Science for the People

#538 Nobels and Astrophysics
This week we start with this year's physics Nobel Prize awarded to Jim Peebles, Michel Mayor, and Didier Queloz and finish with a discussion of the Nobel Prizes as a way to award and highlight important science. Are they still relevant? When science breakthroughs are built on the backs of hundreds -- and sometimes thousands -- of people's hard work, how do you pick just three to highlight? Join host Rachelle Saunders and astrophysicist, author, and science communicator Ethan Siegel for their chat about astrophysics and Nobel Prizes.