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New Reports Show That The Affordable Care Act Is Helping Struggling Public Hospitals Stay Open


As many hospitals across the country struggle to keep their doors open and cut back on services, some publicly traded hospitals are reporting that the Affordable Care Act (ACA) helped them increase their bottom lines, according to a Nashville Business Journal blog post.

The Medicaid expansion program is having a dramatic effect on admissions, according to several hospital company executives.

Community Health Systems Chief Financial Officer Larry Cash told investors the organization has already seen a decrease in self-pay admissions in the states that have expanded their Medicaid programs and predicted that the law would lower those kind of admissions from 8 percent to 4 percent over a three-year period.

Fewer uninsured admissions means fewer costs to hospitals, which is crucial as budgets tighten and reimbursement contributions shrink.

Tenet Healthcare also reported significant decreases in the number of uninsured/self-pay admissions as more patients gain Medicaid coverage. In a Tenet investor presentation, company executives reported that in Medicaid expansion states, admissions of patients with Medicaid coverage increased 17 percent from the levels recorded in early 2013. Meanwhile, in states that refused the expansion, admissions of patients with Medicaid insurance actually declined during the same time period. Even more importantly, admissions of uninsured patients fell 33 percent in the Medicaid expansion states — while in the non-expansion states, uninsured admissions increased 2 percent.

In the report, Tenet executives state that the ACA is “tracking nicely,” with “clear differences in Medicaid expansion states.” They also predict “additional reform-related favorable impact” in the second half of 2014.

The CEOs of LifePoint Hospitals and HCA reported similar experiences: in states that expanded their Medicaid programs, Medicaid admissions grew, while the number of uninsured admissions declined at faster rates than in states that have yet to comply with the Medicaid provisions of the health care law.

“So far and as expected, the new health care law has been a net positive for LifePoint with respect to Medicaid expansion,” LifePoint CEO Bill Carpenter said during a call with investors and analysts. “In the seven states where we operate that have expanded coverage, we saw increasing Medicaid and decreasing self-pay volumes. Increases in Medicaid membership and health insurance exchange participation contributed measurably to our results in the quarter. While we don’t expect additional states to expand coverage in 2014, we’re optimistic that more conversions will occur over time.”

Since the beginning of enrollment in October, 4.8 million people have signed up for Medicaid or the Children’s Health Insurance Program (CHIP), but 24 states have refused expand their programs.

Hospitals around the country have urged state legislatures to expand their Medicaid programs, saying that the federal funding would be a lifeline to keep struggling rural and community hospitals afloat. In states that refused the Affordable Care Act’s Medicaid expansion, hospitals are being forced to close their doors or cut back on their services, eliminating care for “the people who use the transplant services, the people who need to be flown to the trauma center, or the infants who need the neonatal intensive care unit,” explained Bruce Siegel, chief executive officer of America’s Essential Hospitals, a Washington-based advocacy group for facilities that treat large numbers of uninsured or low-income patients.

Closures and cutbacks at public hospitals have created “delays that can result in lethal consequences,” Bloomberg News reported.

“Everyone in a community will be affected,” said Siegel. “We could see the end of life-saving services, and patients would bear the brunt.”

Joanne Peters, a spokeswoman for the U.S. Health and Human Services Department, said hospital closures and funding problems fall on the shoulders of the state legislatures that failed to expand Medicaid, which would reduce the amount of uncompensated care hospitals typically handle. As part of Medicaid expansion, the federal government would pay 100 percent of the cost for the first three years, and 90 percent in subsequent years.

The ACA isn’t just helping hospitals financially. A recent Department of Health & Human Services report shows hospital-acquired infections and readmissions are down, declines attributed in part to initiatives under the ACA. The reductions in adverse hospital outcomes have prevented 15,000 deaths and saved over $4 billion dollars, according to HHS.

These improvements “reflect policies and an unprecedented public-private collaboration made possible by the Affordable Care Act,” with the collaboration involving agencies and organizations such as Partnership for Patients, the Centers for Medicare and Medicaid Services, and the CDC, HHS noted in the press release. “The public-private partnerships are working collaboratively — along with healthcare providers — to identify and spread best practices and solutions to reducing hospital-acquired conditions and readmissions.”

In more good news for the Affordable Care Act, a recent Harvard study estimated that the health care law could prevent over 30,000 deaths in the next three years by increasing the number of Americans with health insurance.


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