Report: Hospitals in Medicaid-expansion states performing well

Iowa saw 107,500 sign up

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CEDAR RAPIDS — Hospitals in states that expanded Medicaid are seeing higher revenues and a reduction in uninsured patients, according to a new report by PwC’s Health Research Institute.

The report analyzed financial data from the country’s five largest for-profit health systems, which represent 538 hospitals in 35 states.

“There were lots of debates in (Washington) D.C. around these issues,” said Gary Jacobs, a managing director at PWC. “There were lots of promises and good intentions. But the jury was still out on how it would shape up.”

The growth in the 26 Medicaid expansion states and Washington, D.C., starkly contrasts the experience in the 24 states that did not expand the program, the report found. It pointed out that the hospitals in non-expansion states continued to see “flat or sagging admission rates and little reduction in the number of uninsured, largely non-paying patients.”

These trends were expected, Jacobs said, but the gap between expansion and non-expansion states was larger than analysts originals forecast.

According to the Centers for Medicare and Medicaid Services, about 7.2 million people enrolled in Medicaid and its children’s health component since October 2013.

Iowa legislators chose to expand Medicaid through its Iowa Health and Wellness Plan last year. About 107,500 people have enrolled as of August, according to the Iowa Department of Human Services.

The report found that Medicaid admissions in expansion states increased by a range of 10.4 percent to 32 percent across the country’s three largest health systems.

The increases ran parallel with declines of about 47 percent over the first half of the year in uninsured or self-pay admissions. The higher rates also mean hospitals are seeing a decrease in uncompensated care, Jacobs said.

“In some cases we’re talking about over 30 percent,” he added.

However, states that did not expand Medicaid also saw a slight uptick in enrollment of about 4 percent. Jacobs noted this is most likely due to a greater awareness and education around new coverage options and a simplified path to enrollment.

These newly insured people have also had a positive effect on hospital earnings, the report found. For instance, one hospital system saw a 41 percent decline in self-pay emergency room visits.

The increase in new paying customers and reduction in uninsured patients accounts for about $40 million to $45 million of the health systems’ earnings.

But more research is needed, Jacobs said, to get a clearer picture, especially in areas relating to quality of care.

“This was something that people said would happen in policy debates,” he said. “But it’s not until you see reports like ours, in black and white, that you see the real impact.”

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