Study: Rollback of Medicaid expansion would increase rural hospital closures

Rural hospitals are less likely to face closure and more likely to see improved financial performance if they are in states that expanded Medicaid under the ACA, suggests a study published in Health Affairs

For the study, researchers examined hospital closure and financial performance data for 2008 through 2016. The study involved nonfederal, short-term, general and critical access hospitals.

Researchers found the closure rate per 100 hospitals increased from 0.39 for 2008-12 to 0.81 for 2015-16 in nonexpansion states, according to unadjusted numbers. But the closure rate per 100 hospitals decreased from 0.51 to 0.18 for those respective time periods in expansion states.

Additionally, for 2008-12 compared to 2015-16, the study found total margins for hospitals in expansion states improved by 0.011, or about 33 percent, and by 0.005 in nonexpansion states. However, the Medicaid and uncompensated care margins showed a bigger difference, decreasing by 0.12 in nonexpansion states and increasing by 0.106 in expansion states.

Researchers said hospitals in Medicaid expansion states were particularly more likely to see improved financial performance. Those hospitals were also less likely to close if they were in rural markets and in areas with a high uninsured rate prior to expansion.

"Future congressional efforts to reform Medicaid policy should consider the strong relationship between Medicaid coverage levels and the financial viability of hospitals," researchers concluded. "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."

 

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