Safety-Net Hospitals Brace For Funding Changes, Adjustments


Topics: Hospitals, Health Costs, Delivery of Care, Medicaid

Aug 07, 2012

Meanwhile, a new Health Affairs study suggests these facilities may need to rethink their business models.

Modern Healthcare: Variation Seen In Margins At Safety Net Facilities
Safety net hospitals governed by elected officials reported higher profits than those governed by political appointees, not-for-profit boards or for-profit directors, according to a study. … Public hospitals governed by elected officials operated in competitive markets reported the highest operating margin, on average, at 7%. Hospitals governed by political appointees reported a slim average 0.7% operating margin. Safety net not-for-profit and for-profit hospitals reported margins of -0.9% and -2%, respectively (Evans, 8/6).

Politico Pro: Safety Net Hospitals Likely To Struggle
Safety net hospitals that rely on local government subsidies are likely to struggle as the Affordable Care Act takes root, and will be in jeopardy without a major overhaul of their business model, according to a study published Monday in Health Affairs. But at least more doctors are likely to be willing to take new Medicaid patients, a second study in the August edition suggests, when the Medicaid reimbursement rates in 2013 and 2014 will be raised to match Medicare for primary care services (Norman, 8/6).

The Wall Street Journal: Study Finds 31% Of Doctors Shun Medicaid
About one in three doctors across the country doesn’t accept new patients who are covered by Medicaid, the federal-state insurance program that is supposed to enroll millions more low-income Americans as part of the Obama administration’s health overhaul, according to a new government study (Radnofsky, 8/6).

Kaiser Health News: Study: Nearly A Third Of Doctors Won’t See Medicaid Patients
About 69 percent of doctors nationally accept new Medicaid patients, but the rate varies widely across the country, according to a study published Monday in the journal Health Affairs” (Galewitz, 8/6).

CQ HealthBeat: Study Shows A Patient’s Insurance Still Determines Physician Access
About 69 percent of physicians nationwide accepted new Medicaid patients last year, compared to the 83 percent who took new Medicare patients or the nearly 82 percent who saw new privately insured patients, according to a study in the journal Health Affairs published Monday. The study is extrapolated from an annual Centers for Disease Control and Prevention (CDC) survey of 4,326 doctors (Adams, 8/6).

Meanwhile, in California –

California Healthline: Safety-Net Hospitals Face Funding Cuts On Two Federal Fronts
The Affordable Care Act will reduce by at least half the amount of Medicaid money set aside to help safety-net hospitals provide uncompensated care for patients with no insurance and no cash. Hospitals serving a high percentage of uninsured, low-income patients — or disproportionate share hospitals — are reimbursed at a higher rate by Medicaid. The federal government pays about $20 billion a year in DSH payments. In California, 21 public hospitals receive approximately $1.1 billion a year in DSH funding. Private DSH hospitals in California receive additional DSH funding from the state, but that, too, will be reduced. The reductions make sense, hospital officials agree, because more people will become paying customers under ACA. But exactly how those reductions are made will be critical, according to representatives of California’s safety-net hospitals (Lauer, 8/6).

This is part of Kaiser Health News’ Daily Report – a summary of health policy coverage from more than 300 news organizations. The full summary of the day’s news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.

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