A Changing Environment: The Affordable Care Act's Early Effects on Patient Volumes and Finances at 10 Safety Net Hospitals

Research Brief
Publisher: Washington, DC: Mathematica Policy Research
Nov 01, 2016
Authors
Laurie Felland, Peter Cunningham, and Annie Doubleday

Findings in Brief:

Among the six safety net hospitals in states that expanded Medicaid (expansion state hospitals), the research team found the following:

  • Patient volumes grew markedly, especially among Medicaid patients and for outpatient services, reflecting hospital efforts to (1) help uninsured patients enroll in coverage, (2) expand primary care capacity, and (3) improve facilities and systems.
  • On average, the hospitals are treating significantly more insured patients and fewer uninsured patients than they were before the ACA.
  • In line with reductions in uninsured patients, uncompensated (charity care plus bad debt)—declined significantly for the expansion state hospitals.
  • Hospitals’ financial status improved.

Findings for the four hospitals in states that didn’t expand Medicaid (non-expansion state hospitals) include the following:

  • Volumes increased modestly.
  • Payer mix did not markedly improve.
  • Financial status declined on average.

Expansions in commercial coverage under the ACA, including coverage through the federal and state Marketplaces, had limited and somewhat mixed impacts for the hospitals. In some cases, coverage contributed to upticks in bad debt, as many new products require high levels of patient cost sharing, which can be difficult for the hospitals to collect.

Hospitals in both expansion states and non-expansion states experienced declines in their subsidies and are bracing for more cuts, so financial gains could be temporary and further challenges could be on the horizon.

This brief presents the results of a qualitative study of 10 safety net hospitals and their early experiences with the 2014 insurance coverage expansions under the ACA. Supplemented with quantitative information from the hospitals, we examine changes in these hospitals’ patient volumes, payer mix, and finances between early 2013 and early 2015. The study found that, overall, the six hospitals in states that expanded Medicaid fared better than the four in states that did not expand the program. Although the findings of this study are not generalizable to all safety net hospitals, they are useful in understanding changes other hospitals may experience under the ACA.