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Posted by on May 28, 2014 in Health | 30 comments

Medicaid Expansion Leading To Increased Care For Poor And Increased Revenue For Hospitals

After Medicaid was expanded in Oregon prior to the passage of the Affordable Care Act there was an increase in Emergency Room visits from people using their new coverage. This was not surprising and the challenge was to get those with the new coverage both established with primary care physicians and to get the Medicaid patients in the habit of seeing a primary care physician as opposed to over-utilizing Emergency Rooms. This raised questions as to whether we would see a similar initial increase in Medicaid utilization of Emergency Rooms with the expansion of Medicaid coverage under the Affordable Care Act. So far there are optimistic reports regarding the effects of Medicaid expansion.

A recent survey conducted by the American College of Emergency Physicians found that 37 percent of ER physicians reported that patient volume had increased slightly, 9 percent reported that it had increased greatly, and 27 percent reported that the number of ER visits had remained the same.  Only 3 percent reported an increase in patients with private insurance  while 35 percent reported an increase in patients with Medicaid. This could be an indicator that those with Medicaid were having more difficulty than those with new private insurance in finding private primary care physicians. This might also be partially due to patients receiving Medicaid being poorer and sicker and in greater need of emergency services.

Kaiser Health News reported on more promising news for those receiving Medicaid. They found that safety-net hospitals were seeing more paying patients due to more poor patients receiving Medicaid, and these hospitals were therefore bringing in more money.

One of the biggest beneficiaries of the health law’s expansion of coverage to more than 13 million people this year has been the nation’s safety-net hospitals, which treat a disproportionate share of poor and uninsured people and therefore face billions of dollars in unpaid bills.

Such facilities had expected to see a drop in uninsured patients seeking treatment, but the change has been faster and deeper than most anticipated— at least in the 25 states that expanded Medicaid in January, according to interviews with safety-net hospital officials across the country.

“This is really phenomenal,” said Ellen Kugler, executive director of the National Association of Urban Hospitals, based in Sterling, Va., which represents inner-city safety net institutions. “It shows the Affordable Care Act is clearly working in these locations.”

Safety net hospitals, most of which are government-owned or nonprofit, have typically struggled financially because their urban locations mean they treat more uninsured patients who show up in emergency rooms and cannot be turned away.

An Urban Institute study published in the May edition of Health Affairs estimated the costs of uncompensated care to hospitals were as high as $45 billion in 2013. Government programs helped defray 65 percent of those costs, the study estimated.  That left providers billions of dollars in the hole.

They also found that more were receiving care from primary care physicians as opposed to from Emergency Rooms:

Hospital officials say the biggest impact of the change is on patients themselves. Rather than having to rely on emergency rooms, newly insured patients can see primary care doctors and get diagnostic tests and prescription drugs, among other services.

Some safety-net hospitals say they started to see their numbers of uninsured patients dropping almost immediately after the Medicaid expansion took effect in January.

“We have seen a steady decline in our uninsured visits,” said Roxane Townsend, CEO of UAMS. “We did not anticipate this big a drop this quickly.”

About 80 percent of the system’s new Medicaid patients had previously been seen by the hospital as uninsured patients, she said. Their enrollment in coverage means the hospital is paid more for their care and is able to direct them to outpatient services and preventive care.

She said that UAMS has also seen a drop in ER visits by uninsured patients — from 6,000 visits in first three months of 2013 to about 4,000 visits in first three months of this year, calling the decline “significant.”

While some emergency physicians have offered anecdotal reports of increased use of the ER since January, there is no documentation of the health law’s impact yet. Studies examining ER use in Massachusetts following that state’s expansion of coverage showed an initial surge followed by a decline in those numbers over several years.

Denver Health officials said the increase in insured patients since January — most of whom are enrolled in Medicaid – appears to be boosting the number of people seeking care at its primary care clinics, rather than through the emergency room.

Patient visits to Denver Health primary care offices are up 14 percent this year, while ER visits are down 2 percent. Patient visits for mental health and substance abuse services are also up nearly 50 percent.

“Patients are seeking care at better and more cost-effective and more appropriate settings,” said Peg Burnette, chief financial officer at Denver Health.

This trend was not limited to safety-net hospitals. For-profit hospitals are also benefiting from increased coverage:

Although safety-net hospitals may be experiencing the biggest impact from the expansion of coverage, the improvements are not limited to them.

Investor-owned hospital companies HCA, Tenet Healthcare Corp., Community Health Systems (some of which own safety-net hospitals) say they saw their rates of uninsured patients drop by as much as a third in the first quarter of 2014 in hospitals located in Medicaid-expansion states.  HCA said its hospitals in states that chose not to participate in the health law’s expansion of the program saw rates of uninsured patients rise by 6 percent.

LifePoint Hospitals, a Brentwood, Tenn.-based company that owns 60 hospitals nationwide, said the Medicaid expansion led to an average 26 percent reduction in uninsured patients at its facilities.

“It’s been a big financial help,” said Chief Financial Officer Leif Murphy, noting the reduction will help offset the health law’s Medicare funding cuts.

Converting patients from no cash to some cash “is a good thing,” said Sheryl Skolnick, a hospital analyst with CRT Capital Group in Stamford, Conn.

The exception to this trend is in states where Republicans have blocked Medicaid expansion. This is especially foolish as the federal government pays most of the cost, with states, along with hospitals, benefiting from the decrease in uninsured. Salon reported over the weekend on efforts in Georgia, also being seen in other Republican states, to make it more difficult to expand Medicaid in the future by requiring that the decision be made by the state legislature as opposed to by the governor. The conservatives Republicans don’t want to gamble on a Democrat, or even a rational Republican, becoming governor in the future and deciding to accept the federal funds to expand Medicaid.

Originally posted at Liberal Values

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  • In the states like Georgia that did not expand Medicaid many hospitals are actually closing which has already resulted in deaths even for those who had insurance. In Texas the hospitals lobbied Rick Perry and the Legislature to expand Medicaid without success. Foolish and deadly partisan politics.

  • Supporting Obamacare, including Medicaid expansion, is the real “pro-life” position.

  • ordinarysparrow

    Very interesting Ron… not only is medical care and affordable care the right thing to do it looks highly likely that is going to be the better economics too…

    I read this article last night, which is in a similar vein, i think you will find it interesting…

    Leaving Homeless Person On The Streets: $31,065. Giving Them Housing: $10,051.

    Even if you don’t think society has a moral obligation to care for the least among us, a new study underscores that we have a financial obligation to do so.

    Late last week, the Central Florida Commission on Homelessness released a new study showing that, when accounting for a variety of public expenses, Florida residents pay $31,065 per chronically homeless person every year they live on the streets.

    The study, conducted by Creative Housing Solutions, an Oklahoma-based consultant group, tracked public expenses accrued by 107 chronically homeless individuals in central Florida. These ranged from criminalization and incarceration costs to medical treatment and emergency room intakes that the patient was unable to afford.

    With a little more time ACA will show the same benefits….

    http://thinkprogress.org/economy/2014/05/27/3441772/florida-homeless-financial-study/

  • dduck

    More recent articles:
    http://www.nytimes.com/2014/05/26/us/hospitals-look-to-health-law-cutting-charity.html
    I know, it is in certain areas controlled by reps.

    http://www.nytimes.com/2014/05/26/us/irs-bars-employers-from-dumping-workers-into-health-exchanges.html
    I know, there are bad employer’s probably Reps.

    Don’t have a link, but the unions and employers jousting over extra ACA costs.

    And some good news:
    http://www.nytimes.com/2014/05/26/your-money/health-insurance/insurers-once-on-the-fence-plan-to-join-health-exchanges-in-15.html

  • If we were to look purely at avoiding spending money it would probably be more economical to let these people live with poor health care, go into bankruptcy, and continue all the problems of the old system. That is hardly desirable, even if cheaper.

    The question is whether money is being spent in a rational manner under the Affordable Care Act. This data contradicts more Republican predictions of disaster such as that the ER’s will be overrun with new patients and hospitals will lose money. It is still likely that some ER’s will see a big increase and others a small increase.

  • Racer X

    Let me get this straight. My tax dollars are paying these poor people’s medical bills and it is resulting in healthier people and a better economy? Perhaps we should give them more…

  • My wife is the executive director of a home in California that serves severely developmentally disabled adults as part a national chain.

    In May, Governor did a revise of the January state budget. Here are some highlights: Needless to sat her budget won’t being seeing any rate increases for Medi-Cal funded services.

    A large focus of the budget is on continued implementation of the Affordable Care Act, with additional funding going toward expanding Medi-Cal benefits to address a nearly 50-percent increase in Medi-Cal enrollment, a large portion of which was unexpected.

    Overall, the May revision reflects more than $2 billion in added costs compared to what was proposed in the January budget. Among the highlights is a proposed $136.7 billion in spending on health and human services, an increase of $1.2 billion ($839.2 million general fund) over the governor’s January proposal.

    Also higher than anticipated in January is the addition of 1.4 million new Medi-Cal beneficiaries, a 46-percent spike. With Medi-Cal enrollment expected to be 11.5 million in 2014-15 – 30 percent of the state’s population – total Medi-Cal costs in 2014-15 are projected at $2.4 billion.

    As a result, the governor has not included any additional relief in his budget on Medi-Cal rates for providers.

    Better economy? Better for providers? Better for these businesses who are now losing money? Who is going to care for these people when doors close and providers say I cannot afford to see patients for free.

  • It is better for the people described in the article who are receiving coverage. It is better for the hospitals described in the article who are receiving some payment rather than no payment for people who were previously uninsured.

    I do agree that it would be preferable if Medicaid did pay more, or the newly covered had a plan paying better than Medicaid, but in the current political atmosphere they aren’t going to get the Republicans to agree to a more costly alternative.

  • Thanks for your thoughtful comments. Blessings to those being covered.

    The middle class in California signed up to pay for it. And now we will.

  • With Medi-Cal enrollment expected to be 11.5 million in 2014-15 – 30 percent of the state’s population – total Medi-Cal costs in 2014-15 are projected at $2.4 billion.

    JAW DROOPING … 30%

  • I wonder if other states are ready to give financially like Cali is. The test is coming.

    I will likely be long gone when they step up because the medical advances we would have made will be blunted or unaffordable to simpletons like myself. It’s all good. I signed up for it. Everyone deserves some care from somebody.

    I needed some new shods today. Didn’t buy Birkenstock’s. I went for the Double H Mens work boot. Cost about the same but last a lifetime. And even I will out live freaking Birkenstocks.

  • dduck
  • ordinarysparrow

    Kevin maybe you have addressed this directly and i missed it but overall how has ACA effected Chiropractic care… As far as pay has it been reduced to an ad on modality or does the prevention and wellness aspect increase the viability of Chiropractic care pay?

  • Kevin,

    Also keep in mind that the federal government is paying the entire cost of expanded Medicaid at present so the people added on due to the program would not be a valid excuse for the California government to not raise Medicaid payments. There is no doubt that they are having problems which make it difficult to increase payment, but the expanded Medicaid program is not to blame.

    They still could be affected indirectly by the Affordable Care Act due to the “woodwork” effect. They are finding that a significant number of people who qualified for Medicaid in the past but did not apply are now applying, and this is thought to be because of all the publicity surrounding expanded health coverage. Costs for people who now sign up but qualify under the original Medicaid rules are paid under original Medicaid rules where the state and federal government split the cost.

    Republican governors used the woodwork effect to justify not expanding Medicaid in their states, saying that their Medicaid costs would go up even with the federal government paying the cost of the expanded Medicaid program. However as there is nationwide publicity for expanded coverage, the woodwork effect is already being seen in those states even without expanded Medicaid.

  • dduck,

    People have been saying all along that many of the problems faced by the VA are analogous to problems outside of the VA. There are also problems beyond any doctor shortage which are unique to the VA such as being totally dependent upon government funding and the issue of falsification of appointment records.

  • dduck

    No S—–.

  • Hello orinarysparrow; thanks for the question.

    Covered California and the ACA heavily limit Chiropractic physicians from participating. In California I have been licensed as a physician and portal entry doctor since 1981. That was true for Workers Comp issues, medical-legal injuries, expert testimony and treatment in groups plans. Kaiser set the standard for reducing Chiropractic care in the 90s with HMOs and cost cutting measures. That has continued and has been hastened by the ACA.

    Covered California and Essential Health Benefits

    The Covered California board determined that for 2014 the only benefits that would be available on the individual plan side of the Exchange would be the essential health benefits (EHB). While the Kaiser 30 benchmark plan that was chosen by the state legislature does not include a “chiropractic benefit”, doctors of chiropractic can provide EHB services. Plans available for small employers on the SHOP side of the Exchange will be allowed to offer more robust benefit plans including a chiropractic benefit. However, representatives from the Department of Managed Health Care have indicated that many of the SHOP plans will only offer the EHB. Insurance companies in California offering individual plans off of the Exchange have made those plans identical to those being offered on Covered California. This means that for 2014 chiropractic manipulative therapy (CMT) codes (98940-98943) will only be reimbursed through group plans and grandfathered plans that include a chiropractic benefit.

    On their way out.

  • It looks like they are screwing Kevin in California. Chiropractic is generally covered as an essential benefit under the Affordable Care Act. When I checked on what Kevin wrote I found that there are a handful of states where it is not covered: California, Colorado, Hawaii, Oregon, Utah, and District of Columbia. The list is from last year so it is possible that some states changed this before final implementation.

  • ordinarysparrow

    Sorry Kevin… That sounds like restraint of trade….truly do not see how they can do that legally… Hope this can change for the better… sending you good thoughts..

  • If several states aren’t including chiropractic treatment I’m sure it is legal. I just checked the rules regarding essential benefits. Chiropractic treatment is not required as an essential benefit. The closest I could find is a requirement for rehabilitative services which can include physical, occupational therapy, or a chiropractor (and must also include speech therapy, cardiac rehab or pulmonary rehab). The states can decide upon the specifics for insurance plans sold on the exchanges in their state.

    I believe that all the states listed above are ones which had their own exchange making me suspect that it is only states which have their own exchanges which have the option of not requiring chiropractic treatment.

  • If several states aren’t including chiropractic treatment I’m sure it is legal. I just checked the rules regarding essential benefits. Chiropractic treatment is not required as an essential benefit.

    Ron, you state the obvious. It’s not a matter of whether not covering chiropractic care is legal. The issues is with the decision that chiropractic care is or is not an essential benefit.

    So the ACA and states choose where you want to save money. The same old story. Providers and consumers will be screwed to lift the most needy. I get it.

    Then you lose access to good people like me. Oh, well. I will pay a 13% state tax, close my office, pay more for my health care, get less health care, retire and see people pro bono.

    I will never stop serving people. It’s my calling. Blessings to you all …

    And thank you, ordinarysparrow. You are a special person.

  • And recall, any of you can be next …

    All it takes is a law a czar or an edict.

    But, then, a law can be run around by a President (from either party) and most any state. Even the SCOTUS.

    Defined Pensions, retirements, bennies, share holders; nobody is safe because we need to lift everyone. I get it. I am on board. I hope you are as understanding as I am when your time comes.

    I am giving up my future to lift all boats. Will you, retired, teachers, police and fire?

  • Kevin,

    It looks like a bad decision in a handful of states. I’m not even sure if it is about saving all that much money. The states that don’t cover chiropractors have to cover physical therapy. You probably know more than I do regarding comparative charges. Do you know if in the past insurance paid all that much less for PT than to Chiropractors?

    The policies sold thru the exchanges are a relatively small amount of the insurance market. Are many employer plans still covering? They don’t have to continue but they didn’t have to cover Chiropractors in the past. If their employees are accustomed to the benefit there is a good chance they will continue. Medicare also wouldn’t be affected and will continue to cover as in the past.

  • You probably know more than I do regarding comparative charges. Do you know if in the past insurance paid all that much less for PT than to Chiropractors?

    I am a licensed physician in Cali who can accept patients as a portal entry doctor to the system. PTs cannot do that. PAs and nurse practitioners work under physicians licenses. You must see where this is going. Think more in terms of control of care. Control will control cost and it will restricts access for most … but add access to those with least access.

    Most of us well served will have less care but those with least care will be “saved”. I am on board.

    I will leave my last question out there to pensioners. It is all ending because we cannot afford you because we need to lift all boats. Are you on board?

  • What about Worker’s Comp and Auto? They also aren’t affected by the ACA. Hopefully they will help keep your office open.

  • I don’t know much about the way you practice, but I have a hunch it is not medical-legal based which is an inherently adversarial system.

    Somebody is always telling you “no” or trying to make the injured and or physician out to be a crook (because there are those).

    It is exhausting for a honest man. However, I imagine the crooks get off on it. Think along the lines of the Wolf of Wall Street. I am very good at what I do but tired of the rising tide.

    By all accounts, you are one of the good guys and your practice focuses it’s interest in serving your fellow man and woman. I can do that in a boutique cash practice with zero overhead and even less stress. I just can’t help as many people. I have made it clear why.

  • dduck

    The system, all hail the system, it is for the greater good. 1984-Not

  • dduck,

    Agree, the decision of a small number of states not to cover Chiropractic services in policies sold through the exchanges (which represent a small part of the insurance market) certainly is not 1984.

  • dduck

    Sorry, I meant that that was not a quote from 1984, it is however one from 2014.

  • Kevin,

    “I don’t know much about the way you practice, but I have a hunch it is not medical-legal based which is an inherently adversarial system. ”

    I see your point. Comp and Auto are a relatively small part of my practice. Only a portion of these claims ever become adversarial. However I could see things being quite different in a practice with a large number of such claims. Fortunately the bulk of the legal type stuff I get drawn into is cases of a patient utilizing an attorney to get on disability. In those cases I only see their lawyer when they do a deposition so it is not an adversarial situation.

    Getting back to whether this done to save money, you said “I am a licensed physician in Cali who can accept patients as a portal entry doctor to the system. PTs cannot do that. PAs and nurse practitioners work under physicians licenses. You must see where this is going. Think more in terms of control of care. Control will control cost …”

    On the one hand I could see that having a patient see you as opposed to PT could lead to other expenses since PT can’t refer elsewhere. However compare a situation where someone comes to see me versus you for back pain (assuming a case beyond those which will resolve in a week regardless of what we do but short of those requiring invasive treatment). I bet it would be cheaper to see you.

    If someone comes to me for back pain, as an internist I’m going to do a full medical exam and charge at that level. I’m going to get at least a CBC, sed rate, and basic metabolic panel. Most people seeing me are going to want a prescription, so this adds on at least the cost of an NSAID and/or muscle relaxant. (Plus with segments of the area where I practice, this might also entail counseling as to why they don’t need Methadone for their back pain, or in the far too many cases in which already are on Methadone, counseling as to weaning after the acute episode is over. Such counseling adds to my charges.) Assuming a case where either PT or manipulation is needed, I will refer out to PT, a Chiropractor, or DO who specializes in manipulation. Plus if the pain persists there will be repeat office calls paid to me. Therefore insurance is paying my charges, which I bet are higher than yours for the reasons noted above, pay for the lab work, and then pay someone else for the manipulation. I bet that your charges for your assessment and then manipulation total less than this. You wouldn’t be prescribing drugs. I don’t know if you would order lab. If x-rays are needed they would be added on to the charges from either of us.

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