Obamacare Already Helping Hospitals’ Bottom Line

One of the most obvious and important benefits of the Affordable Care Act is that it should reduce the number of people who go to hospitals and can’t afford to pay their bills. In fact, that has already begun to happen, especially in states that passed the Medicaid expansion portion of the law.

Community Health Systems CFO Larry Cash told investors and analysts during the company’s first-quarter earnings call Wednesday that the ACA should decrease self-pay admissions from about 8 percent to about 4 percent over a three-year period. The company has seen some early moderate impacts, especially in Medicaid expansion states where self-pay admissions have already begun to drop, Cash said.

“We believe we have recognized, although on a roughly calculated basis, at least $10 million from the ‘woodwork effect’ [in which people currently eligible for Medicaid but who had yet to sign up will now do so because of the ACA] and the Affordable Care Act for additional Medicaid business,” Cash said.

Brentwood-based LifePoint was also high on the ACA’s impacts during its first-quarter earnings call last week, with company leadership emphasizing Medicaid expansion’s effects in many of the states where it operates hospitals.

Other companies are finding even better results:

Another hospital group, HCA, said that in the four states in which it operates that have expanded Medicaid, they’d seen a 29 percent decline in admissions of people without insurance, but a 5.9 increase in the non-expansion states.

A 29 percent decrease is pretty huge, meaning big savings for the hospitals, but also big savings for the local and state governments that won’t have to figure out how to help the hospitals pay for all that uncompensated care.

It should also reduce both hospital and insurance costs because that unpaid medical care gets passed on to everyone else.

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  • http://onhandcomments.blogspot.com/ left0ver1under

    And this is with a hamstrung, compromised version of the plan. Imagine how much better it would be if the republicans hadn’t resisted so much, if Obama actually had a spine.

  • http://en.uncyclopedia.co/wiki/User:Modusoperandi Modusoperandi

    I’m sick and tired of this “take take take” Entitlement Society. Mooching money from hospitals or mooching from the taxpayer, they’re still Moochers. You Moochers should stop thinking only about yourselves and start thinking about others. Besides, all this new, “free” Medicaid money should instead be going to strengthening my Medicare. And then some of it should go back to Medicaid when I’m at the end, in a home. But just enough to cover me. Again, you Moochers should stop thinking only about yourselves and start thinking about others.

  • dingojack

    MO – screw you!! The money should go to our brave men in uniform*.

    WHY DO YOU HATE THE US (industrial-military complex) SO MUCH???!!??

    Dingo

    ——–

    * As long as those military types are white, male, Christian and heterosexual, naturally.

  • A Masked Avenger

    Obamacare Already Helping Hospitals’ Bottom Line

    You understand that that’s precisely what it was designed to do, right? To funnel greater profits to hospitals, HMOs and insurance providers?

    Note that most of these reports give tangentially-related metrics, like a 29% decrease in “admissions of people without insurance.” Translating this into the “bottom line” that you allude to is non-trivial. For example, the government gives money to providers for “uncompensated care”–but that doesn’t mean what you think it means. It includes uninsured patients who can’t pay, but that is not the bulk of “uncompensated care.” Any discrepancy between the billed and paid amounts counts as “uncompensated care.” But hospitals routinely bill at hugely inflated rates, and then receive only a partial payment from the insurer. The difference is then reported to the government as “uncompensated care,” for which they receive a kickback. This will continue even after 100% of the population is insured. Note that the hospital made a handsome profit off the partial payment from the insurance company; the uncompensated care bonus is all gravy.

    It’s all a big shell game, in which everyone is getting swindled. The government didn’t create the shell game–but instead of doing anything constructive to fix it, they’re feeding the problem. It’s roughly analogous to a mugger who takes your money or, if you don’t have any, beats you up. The way to reduce injuries from severe beatings is not to require everyone to carry a wad (subsidized if you can’t afford one) so that everyone can pay off the mugger.

  • Synfandel

    I congratulate my American cousins for taking their first wobbly step toward a fair and efficient single-payer system. Keep trying. I know you can get there.

  • http://dontlinkmebro F [i’m not here, i’m gone]

    Synfandel

    Thanks for the support. I hope you are correct.

  • Kevin Kehres

    But but but…DEATH SPIRAL!

    (This message brought to you by the Republican Party and Fox News.)

  • marcus

    Kevin Kehres @ 7 How could you? You obviously forgot…

    BENGHAZI!

  • http://polrant@blogspot.com democommie

    “if Obama actually had a spine.”

    This meme gets a bit tiresome.

    I don’t have the foggiest notion why he does what he does. but gutlessness is not a motivator.

    HIS congressional majority told him to go shit in his hat beginning in mid-2009.

    Spinelessness is an accurate description of the character of many in politics, particularly the U.S. Congress; it does not apply to Mr. Obama.

  • matthewhodson

    Meanwhile in Australia our government is trying to reduce our healthcare system to something like Obamacare.

    What is it about modern conservatives that enables them to be so ruthless in their dismantling of fair social policies while the modern left wing are so timid in their attempts to bring about decency and fairness in economic systems?

  • http://polrant@blogspot.com democommie

    “while the modern left wing are so timid in their attempts to bring about decency and fairness in economic systems?”

    I blame soft-hearted left wing parenting in the late 20th century. If we had had parents who said, “Kill those motherfuckers while they’re little, it’ll be harder when they grow up!”, a punch in the nose would have been the prelude instead of the extent of Karl Rove’s playground comeuppance.

    “Obamacare Already Helping Hospitals’ Bottom Line.’

    Have you seen the Soylent Green trucks backed up by the ER’s exit?

  • http://trishwilson.typepad.com/the_count/ The Count

    @10, People seeking authoritarianism are attracted to conservatism because it enforces the status quo through rigid laws and dogma. Said voting bloc can then be wielded as a hammer by politicians who get paid by interests that are, to be kind, self-serving.

     

    The same with some people of faith. Not only are they more easily led but they’re capable of suspending morality and ethics when told to do so by someone who talks to their god. They are the gold standard of voting blocs.

     

    By definition, progressives are not typically fearful of <take your pick of bugaboos>, so it takes a lot to get us motivated; we’re more like a herd of cats and It’s not a bad thing either. We’re not interested in what someone else does with their time and we want to be left alone with our friends and loved ones to enjoy life, liberty, and happiness. Progressives generally don’t see life as a zero-sum game so decency and fairness in any system is a worthwhile goal.

     

    Frankly, we only get motivated once conservatives noticeably over-reach and make one too many power grabs. Luckily for us, this is one of those times.

  • eric

    I congratulate my American cousins for taking their first wobbly step toward a fair and efficient single-payer system. Keep trying. I know you can get there.

    Hey, this is our third wobbly step! Don’t forget medicare and the veteran’s administration. US conservatives seem to be perfectly fine with state-run single-payer health care for retirees and veterans, just not the working poor.

    I bring this up somewhat tongue in cheek to make a point, which is that we may be moving towards a reasonable system faster than people think. I wouldn’t be surprised at all if we had a single-payer national political conversation in the next 10-20 years.

  • http://trishwilson.typepad.com/the_count/ The Count

    BTW, I think the GOP’s worst nightmare is not voters who sign up with the ACA getting dependent on it.

     

    It is much worse than that. it is companies who regularly contribute to the GOP getting dependent on it. Stories like this make me smile.

  • http://polrant@blogspot.com democommie

    @14:

    democommie doing his best Rod Serling:

    Imagine, you’re in a world where the regulation of politics is such that a Money Spigot (Model 501c3 or 501c4) is turned on to pour lucre into a Teabagistanian candidates primary bid while, simultaneously pouring lucre into the incumbent’s campaign so that he will champion legislation that both he and they fought tooth and nail in the distant past*.

    Wait, don’t bother imagining it, turn on your teevee.

    * Where the value for “distant past” > 24 hours.