Noteworthy News

Medicaid Expansion Helps Save Hospitals

Hospitals in states that took advantage of the Affordable Care Act to expand their Medicaid programs are six times less likely to close than hospitals in non-expansion states.

And the impact of Medicaid expansion is even more beneficial for hospitals that serve rural communities.

These are among the new findings in a new study that examines the effect of Medicaid expansion on hospital finances and hospital closures.  Among those findings,

We found that the ACA’s Medicaid expansion was associated with improved hospital financial performance and substantially lower likelihoods of closure, especially in rural markets and counties with large numbers of uninsured adults before Medicaid expansion.

According to the study, these hospitals, as a result of Medicaid expansion, served fewer uninsured patients and provided less uncompensated care than they previously had, thereby improving their financial health.  This effect has been especially pronounced in communities with especially large numbers of uninsured patients – communities like those served by urban safety-net hospitals.

For this reason, the study’s authors conclude that

Future congressional efforts to reform Medicaid policy should consider the strong relationship between Medicaid coverage levels and the financial viability of hospitals. Our results imply that reverting to pre-ACA eligibility levels would lead to particularly large increases in rural hospital closures. Such closures could lead to reduced access to care and a loss of highly skilled jobs, which could have detrimental impacts on local economies.

 To learn more, go here, to the Health Affairs web site, to see the study “Understanding The Relationship Between Medicaid Expansions And Hospital Closures.”

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