Medicaid Expansion Has Improved the Financial Outlook for Safety-Net Hospitals

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<p>Safety-net hospitals in states that expanded Medicaid coverage under the Affordable Care Act have become more financially stable relative to those in nonexpansion states, thanks to larger increases in Medicaid revenues as well as reduced costs for uncompensated care, according to a new Commonwealth Fund–supported study.</p><p>Analysis of hospital cost data from 2012 and 2015 by researchers with Dobson DaVanzo show that safety-net hospitals in Medicaid expansion states saw larger increases in Medicaid patient volume and revenue, reduced charity care and bad debt, and improved financial margins. The story was different in nonexpansion states, where safety-net hospitals experienced declines in operating margins, Medicaid revenues, and patient volume.</p>
<p>Safety-net hospitals are important providers of care to low-income patients, including Medicaid enrollees and the uninsured, typically providing services that other hospitals in the community don’t offer, such as trauma, burn care, neonatal intensive care, and inpatient behavioral health. With greater financial stability, the researchers say, safety-net hospitals are better able to expand outpatient capacity, invest in strategies to improve care coordination, and hire new staff — all to the benefit of the communities they serve.</p> Read the study