news What the Recent Literature Says About the Expansion of Medicaid: Economic Impact on Providers

The Affordable Care Act (ACA), which has been adopted by all but 11 states as of January 2023, has a significant body of research examining the impact of Medicaid expansion. Better Coverage, Improved Access and Health, and Economic Benefits for States and Providers. These generally positive results persist despite recent studies considering increasingly complex and specific results. This study provides background to the ongoing debate about whether to still expand Medicaid in states with limited coverage options for many low-income adults. In unenlarged states, more than 2 million individuals are in a coverage gap. Previous efforts at the federal level to temporarily close the coverage gap failed in 2021 and 2022. With Republican control of the House after the November 2022 midterm elections, Congress may do so in the near future. So the attention is again turned to non-expanded states, where many officials cite economic concerns about adopting expanded Medicaid.

States are required to cover 10% of Medicaid expansion costs, while the federal government covers the remaining 90% and injects federal funds into expanding states. By funding coverage for low-income people who are likely uninsured, Medicaid expansion provides potential economic benefits to health care providers who care for that population.

This issue briefly updates the previous KFF literature review by summarizing 24 studies published between April 2021 and December 2022 on the economic impact of Medicaid expansion on health care providers. To do. These studies, in line with previous studies, identify positive effects of Medicaid expansion on the finances of hospitals and other providers. These findings are particularly relevant given the financial stress experienced by Medicaid providers during the coronavirus pandemic. In the first two years of the pandemic, federal relief funds supported hospital margins, but in 2022, the broader impact of the ongoing pandemic, reduced government relief, pressure on wages, etc. Due to recent economic trends, hospitals have begun to face greater challenges.

Our methodology is consistent with that of previous analyses. Our findings fall into two topic areas. Payer composition and its impact on provider financial performance (Figure 1). Within each topic area, we first briefly summarize findings from previous studies (published between January 2014 and March 2021), and then recent studies that add to this body of evidence. highlights key findings from the study of For more information on previous studies, see the 2021 and 2020 Literature Review sections on Economic Impact on Providers. For citations from January 2014 to August 2022, see Resources.

Payer Configuration and Uncompensated Care

Previous studies have overwhelmingly found that the expansion of Medicaid has resulted in an improved payer mix (fewer uninsured patients and/or more Medicaid eligible patients). Findings include improved payer mix for hospitalizations, emergency department visits, and visits to community health centers and other safety net clinics. Studies have identified improvements in payer composition across and among patients undergoing treatment for a variety of specific conditions, including various types of cancer, trauma, and substance use disorders. In line with the improved payer mix, the study also found a decline in uncompensated medical costs (UCC) overall and in certain types of hospitals, including rural hospitals.

Consistent with previous studies, nearly all recent studies found that expansion improved payer mix and decreased UCC, including patients receiving treatment for specific diseases. Of the 18 studies that examined the impact of expansion on payer composition, 11 both Decrease in proportion of uninsured patients When more patients eligible for Medicaid,,,,,,,,,,, A further five studies found an increase in Medicaid patients but were not studied or found no effect of expansion on the proportion of uninsured patients.,,,,, In line with these improvements, three studies also show a decrease in UCC in hospitals and other health care providers.,, Notably, all studies that considered emergency department visits found an improvement in payer composition. Research continues to explore and find improvements in payer composition for patients treated for certain conditions, such as various types of surgery and behavioral therapy hospitalizations. Although hospitals are most frequently considered in studies evaluating payer mix, two of his recent studies considered primary care patient coverage. Both found an increase in visits to Medicaid-covered primary care providers.,, Two recent studies found no impact of the expansion on insurer mix, but had a limited focus on critical access and safety net providers.,

Financial Performance of Hospitals and Other Providers

Previous research has found that Medicaid expansion has improved the financial performance of hospitals and other providers, but these effects can vary somewhat by hospital type. Studies have shown that the expansion contributed to an increase in overall hospital revenue and revenue from specific services. Some studies show that expansion has reduced the number of hospital closures per year. Studies have found that expansion has improved operating margins and profitability for providers, but these findings vary by provider type. For example, several studies have found that improvements in financial performance were stronger (or only observed among) smaller rural hospitals, despite declines in UCC. A small number of studies suggest that improvements in payer mix and UCC in hospitals may be partially offset by an increase in unpaid Medicaid care and a decrease in commercial revenues.

Recent studies continue to see major economic impacts of expansion for certain types of hospitals, clinics, and other health care providers. Six out of eight studies in this area found expansion has positive financial outcomes for different types of providers.,,,,, However, two recent studies suggest that these positive effects fall short of access-critical hospitals and free charity clinics.,

  • hospital. Research suggests that hospitals experienced more reimbursement, and the decline in uncovered medical costs outweighed the increase in uncovered Medicaid care, with a net positive effect., One study found that expansion was associated with a significant reduction in hospital closures, but this effect was concentrated in hospitals without it The expansion had no lasting impact on the closure of the hospital’s maternity department. Federal law requires all states, including those that have not expanded Medicaid, to provide Medicaid coverage to pregnant women with incomes up to at least 138% of her poverty level.
  • Clinics and primary care providers. Research shows that federally accredited health centers and community health centers see increased revenue after expansion., A study also found that primary care provider salary growth was higher in expanding and non-expanding states.

Future prospects

These new studies add to a body of previous research that has found overwhelmingly positive economic effects of expansion on health care providers. Findings like this are particularly relevant given the financial stress Medicaid providers have experienced during the coronavirus pandemic, including the recent challenges hospitals faced when federal relief funds expired. . The study also provides background to the ongoing debate about whether to expand Medicaid in states that haven’t yet.Moreover, previous literature on the economic impact of expansion State Positive effects were seen such as budget savings, revenue growth and overall economic growth. Although research in this area appears to be slowing, these findings are relevant. State costs continue to be a key issue in the expansion debate, and there have been fluctuations in state economic conditions during the COVID-19 pandemic. Future studies could also capture the impact of additional one-time fiscal incentives included in the 2021 American Relief Plans Act (ARPA) (expanding state costs for his first two years of expansion after implementation). more than offset).

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