The Kaiser Family Foundation reported financial results from one of the largest hospital systems in the United States, showing a marked decline in visits by uninsured patients in states that expanded Medicaid under the Affordable Care Act. The report analyzes changes in discharge volumes, hospital finances and other outcomes between the last three quarters of 2013 (before implementation of the ACA coverage expansions) and the first three quarters of 2014, through Sept. 30.

Using data provided by Ascension Health, a not-for-profit health system with 131 acute-care hospitals in 23 states and the District of Columbia, researchers found that in Medicaid expansion states, Medicaid discharge volumes increased 7.4 percent and self-pay/uninsured discharge volumes declined 32.3 percent. In non-expansion states, Medicaid discharge volumes increased 1.4 percent and self-pay/uninsured discharge volumes declined by 4.4 percent.

Ascension hospitals in expansion states saw an 8.2 percent increase in Medicaid revenue and a 63.2 percent decrease in self-pay revenue, in contrast to non-expansion states, which reported a 9.4 percent decline in Medicaid revenue and 2.4 percent increase in self-pay. Charity care costs plummeted 40.1 percent in Medicaid states, versus 6.1 percent in non-expansion states.

As expected, gains in revenue within hospitals in expansion states were largely due to increased Medicaid revenue, while revenue growth in non-expansion states came from patients with commercial insurance. Expansion state total revenue grew slightly less (1.3 percent) compared to non-expansion state total revenue (2.3 percent).

“Expanded health insurance coverage through the Affordable Care Act (ACA) is having a major impact on many of the nation’s hospitals through increases in the demand for care, increased patient revenues, and lower uncompensated care costs for the uninsured,” the authors said. “These data suggest that Medicaid expansion can offset the cost of care to the poor and serve as a growing source of revenue as hospitals face cuts in payment and DSH funds.” 

Source: Kaiser Family Foundation, How are Hospitals Faring Under the Affordable Care Act? 

Our Take: The Ascension data aren’t unique. KFF reports that Dignity Health experienced a 50 percent decrease in uncompensated care and an 11.5% increase in patient revenue between the third quarters of 2013 and 2014, which they say comes from a shift from self-pay and uninsured insured patients. Between the first quarters of 2013 and 2014, Unity-Point Health saw a 33 percent increase in patient revenue from Medicaid, a 27 percent decrease in charity care, and a 25 percent increase in patient revenue from commercial insurance. And in the first three quarters of 2014, compared to the same period in 2013, Providence Health System saw self-pay volumes decline by 44 percent and Medicaid revenues up by 25 percent.

So far this is the strongest evidence of the positive effect of providing insurance access to the uninsured population stemming from the Affordable Care Act. States that expanded Medicaid saw increased Medicaid discharges, increased Medicaid revenue and a declining spend on charity care. In contrast, non-expansions states had very small increases in Medicaid discharges, declining Medicaid revenue and an increase in the cost of caring for the poor.

Taking the Medicaid money offered by the Federal government, no matter how politically untenable, appears to benefit both the previously uninsured and the hospitals that care for them.

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