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Re: Hospital Finances Improve After Medicaid Expansion, But At Whose Expense? WHERE ARE THE SAVING

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: Hospital Finances Improve After Medicaid Expansion, But At Whose Expense? WHERE ARE THE SAVING

 

Nearly a quarter of rural hospitals are on the brink of closure

 

More than a fifth of the nation's rural hospitals are near insolvency, according to a new report.

 

 

Twenty-one percent of rural hospitals are at high risk of closing, according to Navigant's analysis of CMS data on 2,045 rural hospitals. That equates to 430 hospitals across 43 states that employ about 150,000 people and generate about $21.2 billion in total patient revenue a year.

 

 

Hospitals are often the economic drivers of rural communities. Per capita income falls 4% and the unemployment rate rises 1.6 percentage points when a hospital closes, a related study found. Ninety-seven rural hospitals have closed since 2010, according to the University of North Carolina Cecil G. Sheps Center for Health Services Research.

 

As rural populations decline, inpatient admissions fall, more beds sit vacant, and the number of people covered by government-sponsored plans rises, these communities are left to grapple with the ramifications of losing a hospital, said Dr. Daniel DeBehnke, a Navigant managing director, co-author of the report and former CEO of the Omaha-based Nebraska Medicine system.

 

 

"There is a snowball effect that drives a lack of capital, which causes an inability to invest in everything from technology to electronic health records to imaging to keep up with the standard of care," he said. "Looking at the 430 hospitals at risk, that number is significant."

 

 

Researchers used a benchmark of an average 1.4% operating margin over the past three years, 78.5 days cash on hand and 49.8% debt-to-capitalization ratio to determine financial viability.

 

 

They also broke the impact down by state, revealing that half of Alabama's rural hospitals are in financial distress, the highest percentage in the country. At least 36% of the hospitals in Alaska, Arkansas, Georgia, Maine and Mississippi are in financial jeopardy.

 

 

"It's probably the most fragile of situations I have seen in my 23 years at the association," Danne Howard, chief policy officer at the Alabama Hospital Association, told Modern Healthcare in November.

 

 

A loss of acute-care beds and ultimately hospitals is inevitable, experts said. This though, begs the thorny question: How many hospitals does the U.S. healthcare system need?

 

 

Navigant set out to define "essential" by weighing trauma status, proportion of Medicaid days or uncompensated care to net revenue, geographic isolation, and hospital employee-to-county population. More than a third, or 153, of the 430 financially unstable hospitals are not "essential," according to Navigant's data. This is not to say these hospitals aren't important to their communities, DeBehnke said.

 

 

While these metrics provide some clarity, there is no objective definition of an "essential" provider, said Christina Campos, administrator of Guadalupe County Hospital, an independent hospital in rural New Mexico.

 

 

"The contraction of hospitals may be inevitable as some hospitals merge to reduce overhead costs and as others restructure to focus on outpatient and preventive services, thus redefining themselves," she said. "Try telling any community, no matter how large or small, that its hospital is not 'essential.' "

 

 

Neighboring hospitals may find that it's better to work together and specialize in different services by dividing inpatient and outpatient treatment, for instance, Campos added. Hospitals may choose to resize or restructure to reduce their inpatient footprint, like Guadalupe County Hospital did, which typically requires new grants or loans, or a reverse Hill-Burton financing program for improved healthcare infrastructure, she said.

 

 

Passing the bipartisan Rural Emergency Acute Care Hospital Act would help, Navigant said. It would create a new Medicare classification that would allow rural hospitals to offer emergency and outpatient services but no longer have inpatient beds. Policy experts have also urged an overhaul of the Medicare wage index.

 

 

"We want to improve quality and population health and reduce unnecessary admissions and waste, but still don't get paid for it, at least not enough to break even," said Campos, adding that rural hospitals' bare-bones budgets and low staffing levels are further stretched by continued legislative and regulatory Medicare cuts.

 

 

"The greatest financial burden to many rural hospitals is supporting a 24/7 emergency department, where standby staffing costs are high, volumes are relatively low and reimbursement comes nowhere near to covering expenses."

 

 

Telehealth is an important tool that can help rural providers maintain certain services, industry observers said. But broadband internet access and the current reimbursement model set limitations.

 

 

Many large systems support community hospitals that can share some of the lower-acuity workload, evidenced by systems like the University of Alabama at Birmingham that are taking on administrative tasks and sharing specialists with their rural neighbors. This can often be more effective than an acquisition, DeBehnke said.

 

 

When DeBehnke was at Nebraska Medicine, he convened a rural hospital consortium. They shared best practices, revealed each facility's challenges and opportunities, and discussed how to streamline redundant services, he said.

 

 

"The most significant impact was technology and clinical service development," DeBehnke said.

 

 

Telemedicine applications for stroke and transplant treatment, for instance, kept services in the local communities and maintained care in the appropriate settings, he said. Sharing an EHR platform unburdened local facilities and improved care continuity. And sending specialists from the system to rural hospitals once a week or every other week helped mitigate recruitment issues, DeBehnke said.

 

 

Hospitals should create a community health needs assessment that uses data to separate wants from needs, Campos said. But ultimately, changes to services, telemedicine or referral networks require improved EHR interoperability, broadband investment and policy tweaks to bolster reimbursement and encourage clinical integration and data-sharing, she said.

 

 

Hospitals need to recognize they can't provide every service under one roof, Campos said. An ability to provide safe and high-quality care is of utmost importance, she said.

 

 

"Poor care and negative outcomes are more detrimental to the survival of a rural hospital than is poor reimbursement," Campos said. "If your reputation is lacking, your community will no longer support you, and a rural hospital cannot survive without the overwhelming support of its community."

 

 

There is going to be some degree of right-sizing for U.S. hospitals, DeBehnke said.

 

 

"We hope this report shines some light on the issue as we figure out how to do this in the right way," he said.

 

 

Comment :

 

Rural hospitals closing is a big deal. If you want investment, either personal or business, in a geographical  area that area  MUST have a hospital within a reasonable distance.

 

 

If you live in one of those areas your property value and perhaps your job depends on it.

 

 

It's a complicated issue that involves local politics. Hospitals are key to economic growth, it's big business in a small town. The hospital, doctors offices, and outpatient centers that surround it make a small town that has a hospital the place to go for medical care. It also attracts  other business, convenience stores, restaurants, retail stores and box stores like Lowes or WalMart, drug stores.

 

 

In remote rural areas it can mean the life or death of a small town. No one wants to live hours away from a hospital.

 

 

I live in a rural area, nothing like out west, but rural by East Coast standards. It's a poor area, low income, I don't know the numbers but I know a lot of people depend on the ACA , Medicare, and Medicaid to get  access to heath care.

 

 

In my area one hospital serves three counties, and that hospital is owned by a larger group based in the big city which is at least an hour, and perhaps hours away depending on where you are, the weather, and traffic conditions.

 

 

How that group is dealing with the problem of not over serving  the area is to build satellite facilities, some are medical buildings, with some testing equipment, but no beds, another is an emergency room facility with a helicopter pad and very limited beds. 

 

 

All or most of the doctors in the group share electronic records, and patients can access records, see test results, and make appointments online though a patient portal to the system.

 

 

I think what is happening in my area shows what can be done if a state embraces the ACA,  Medicare, and the Medicaid expansion.

 

 

Instead of shrinking the system we expanded it, and the small town hospital and all the business that goes with it remained, property values remained stable, the tax revenue that is connected to those values remained stable,and people got better and more convenient health care access.

 

 

I must admit, I am kind of " wowed " by the new buildings, and my county still doesn't have an emergency facility, but I'm now twenty minutes away form the emergency facility located in the neighboring county.

 

 

Still these are not public facilities, these are privately owned facilities that compete with other systems for customers, so that probably explains the " wow " effect.

 

 

So if you want to know " where the money went " I would say at least in my area, it went into infrastructure to serve my area and the people that live there.

 

 

 

 

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Re: Hospital Finances Improve After Medicaid Expansion, But At Whose Expense? WHERE ARE THE SAVING

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@GailL1 wrote:

NPR - Hospital Finances Improve After Medicaid Expansion, But At Whose Expense? ... March 26, 2019

 

SO WHERE IS THE MONEY ???

Are we getting screwed ?  You decide.

 

 

from the link ~

The uncompensated care costs among Colorado hospitals dropped by more than 60 percent after the state expanded Medicaid coverage — a savings of more than $400 million statewide. But a new report asks why the hospitals didn't pass some of those savings on to patients.

 

. . . . While hospitals are financially better off since the expansion, they have begun shifting even more of their costs to commercial health plans, according to the report.

 

The state (Colorado) researchers note the average hospital profit per each patient discharged rose to $1,359 in 2017 — twice the amount in 2009. For patients covered by commercial and employer-based health plans, the hospitals' profit margins per discharge rose above $11,000 in 2017, compared with $6,800 in 2009.

 

Guess, to be fair, we need to hear ALL sides here -

 

. . . . . a spokeswoman for the Colorado Hospital Association, says the state agency that did the study was biased against hospitals and had a "predetermined conclusion." Hospitals in the state are not doing as well as the report suggests, Lonborg says, noting that a third of them face operating losses.

 

And some insurers, she says, have not passed along to their customers the savings hospitals give the insurers.

 

Hundreds of thousands of state residents gained coverage under the Medicaid expansion, lowering Colorado's uninsured rate by half to 7 percent. In addition, hospitals' uncompensated care costs dropped by more than 60 percent, or more than $400 million statewide.

 

. . . . executive director of the Colorado Department of Health Care Policy & Financing, says that hospitals have used their expanded revenues to focus on adding services that provide high profits or expanding operations in wealthier areas of the state that often duplicate what is already available.

 

They used those dollars to build free-standing [emergency departments], acquire physician practices [and] build new facilities where there was already sufficient capacity," she says. "Hospitals had a fork in the road to either use the money coming in to lower the cost-shift to employers and consumers or use the money to fuel a health care arms race. With few exceptions, they chose the latter."

 

. . . . . Some critics point out that hospitals are also benefiting because Congress has repeatedly delayed a key ACA provision that would have cut federal funding to hospitals that have large numbers of uninsured patients and patients on Medicaid.

 

Hospital's profit margin doubles -

In written testimony to the state legislature last year, Colorado officials pointed to St. Mary's as an example of a hospital with high overhead and operating costs — factors they said can lead to higher insurance premiums.

 

The facility's profit margin was above 14 percent from 2015 to 2017, according to the latest available tax returns. Those figures are nearly double St. Mary's margin before expansion and twice the margin of the average U.S. hospital in 2017, according to American Hospital Association data.

 

Colorado is the first state to analyze whether hospital cost-shifting — often referred to as a "hidden tax" on health plans — dropped after Medicaid expansion.

 

But a conservative think tank in Arizona says hospitals there did not cut prices following that state's Medicaid expansion.

 

"Not only did [it] fail to deliver on the promises of alleviating the hidden health care tax, it allowed urban hospitals to increase charges on private payers dramatically," says a report from the Phoenix-based Goldwater Institute.

 

The continuation of the program — called Medicaid disproportionate share hospital payments — has provided Colorado hospitals a total of $108 million.

 

How outside costs may factor in

The hospital industry disputes reports that it has merely pocketed profits from Medicaid expansion.

 

Hospitals say many factors influence how much they charge employers and private insurers,

including the need to upgrade technology and meet rising costs of health care and drugs.

 

(An Official)  of the state hospital association says hospitals need to shift costs to private employers to make up for lower prices paid by Medicare and Medicaid, and to make up for care hospitals continue to give free of cost to the uninsured.

 

But, she adds, other factors, including the need to keep up with rapid population growth, have kept costs from dropping.

 

Read more excuses and where the money went for this (example) hospital at the above NPR link ~

 


Nice story but really means nothing right now. With the entire health care system being destroyed by the far right and Trump you will have these messes until we get back to a rational policy so it is a total waste of time to try and fix this which is only a small part of the total problem in health care. Notice what the Medicaid expansion did to the uninsured rate.  If you have a medicare for all type of approach you would not have this problem since the National Program will set what it pays for all types of services in a hospital just as is done in Medicare today. You can still have Insurance Carriers in the approach I talk about so lets not hear it would kill them.

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Re: Hospital Finances Improve After Medicaid Expansion, But At Whose Expense? WHERE ARE THE SAVING

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Well, Colorado has no Certificate of Need process. No ability to regulate building new hospitals unless access is needed. That’s stupid.

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Hospital Finances Improve After Medicaid Expansion, But At Whose Expense? WHERE ARE THE SAVINGS?

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NPR - Hospital Finances Improve After Medicaid Expansion, But At Whose Expense? ... March 26, 2019

 

SO WHERE IS THE MONEY ???

Are we getting screwed ?  You decide.

 

 

from the link ~

The uncompensated care costs among Colorado hospitals dropped by more than 60 percent after the state expanded Medicaid coverage — a savings of more than $400 million statewide. But a new report asks why the hospitals didn't pass some of those savings on to patients.

 

. . . . While hospitals are financially better off since the expansion, they have begun shifting even more of their costs to commercial health plans, according to the report.

 

The state (Colorado) researchers note the average hospital profit per each patient discharged rose to $1,359 in 2017 — twice the amount in 2009. For patients covered by commercial and employer-based health plans, the hospitals' profit margins per discharge rose above $11,000 in 2017, compared with $6,800 in 2009.

 

Guess, to be fair, we need to hear ALL sides here -

 

. . . . . a spokeswoman for the Colorado Hospital Association, says the state agency that did the study was biased against hospitals and had a "predetermined conclusion." Hospitals in the state are not doing as well as the report suggests, Lonborg says, noting that a third of them face operating losses.

 

And some insurers, she says, have not passed along to their customers the savings hospitals give the insurers.

 

Hundreds of thousands of state residents gained coverage under the Medicaid expansion, lowering Colorado's uninsured rate by half to 7 percent. In addition, hospitals' uncompensated care costs dropped by more than 60 percent, or more than $400 million statewide.

 

. . . . executive director of the Colorado Department of Health Care Policy & Financing, says that hospitals have used their expanded revenues to focus on adding services that provide high profits or expanding operations in wealthier areas of the state that often duplicate what is already available.

 

They used those dollars to build free-standing [emergency departments], acquire physician practices [and] build new facilities where there was already sufficient capacity," she says. "Hospitals had a fork in the road to either use the money coming in to lower the cost-shift to employers and consumers or use the money to fuel a health care arms race. With few exceptions, they chose the latter."

 

. . . . . Some critics point out that hospitals are also benefiting because Congress has repeatedly delayed a key ACA provision that would have cut federal funding to hospitals that have large numbers of uninsured patients and patients on Medicaid.

 

Hospital's profit margin doubles -

In written testimony to the state legislature last year, Colorado officials pointed to St. Mary's as an example of a hospital with high overhead and operating costs — factors they said can lead to higher insurance premiums.

 

The facility's profit margin was above 14 percent from 2015 to 2017, according to the latest available tax returns. Those figures are nearly double St. Mary's margin before expansion and twice the margin of the average U.S. hospital in 2017, according to American Hospital Association data.

 

Colorado is the first state to analyze whether hospital cost-shifting — often referred to as a "hidden tax" on health plans — dropped after Medicaid expansion.

 

But a conservative think tank in Arizona says hospitals there did not cut prices following that state's Medicaid expansion.

 

"Not only did [it] fail to deliver on the promises of alleviating the hidden health care tax, it allowed urban hospitals to increase charges on private payers dramatically," says a report from the Phoenix-based Goldwater Institute.

 

The continuation of the program — called Medicaid disproportionate share hospital payments — has provided Colorado hospitals a total of $108 million.

 

How outside costs may factor in

The hospital industry disputes reports that it has merely pocketed profits from Medicaid expansion.

 

Hospitals say many factors influence how much they charge employers and private insurers,

including the need to upgrade technology and meet rising costs of health care and drugs.

 

(An Official)  of the state hospital association says hospitals need to shift costs to private employers to make up for lower prices paid by Medicare and Medicaid, and to make up for care hospitals continue to give free of cost to the uninsured.

 

But, she adds, other factors, including the need to keep up with rapid population growth, have kept costs from dropping.

 

Read more excuses and where the money went for this (example) hospital at the above NPR link ~

 

* * * * * * It’s Always Something - Roseanne Rosannadanna
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