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Tuesday
Feb112014

Medicaid Expansion: Bad For Arkansas Hospitals

Our latest policy paper examines the impact of the “private” option on Arkansas hospitals. The news is not good.

Authors Dan Greenberg and Shane Stacks explain that the basic realities of Arkansas hospital finance cannot justify the private option, or any other form of Medicaid expansion. Key findings include:

  • The problem of hospitals’ uncompensated care is driven primarily by bad debt, which the private option does not address;

  • The problem of hospital bad debt, and uncompensated care generally, is likely overstated by hospitals’ use of “charge basis” accounting;

  • The private option will weaken hospital balance sheets by increasing both their bad debt and their undercompensated Medicaid costs;

  • The private option will increase both the costs and the burdens in already-strained Arkansas hospital emergency rooms;

  • The Affordable Care Act’s scheduled Medicaid cuts which supposedly justified the private option – like the Affordable Care Act’s scheduled employer mandate – never happened.

The report contains a statistical analysis of many of the publicly disclosed Form 990s that nonprofit hospitals have filed. The analysis demonstrates that undercompensated Medicaid expenses, which the private option is supposed to remedy, only constitute about 10% of hospitals’ uncompensated care problem -- and that the private option will by and large leave the other 90% of uncompensated care unaffected.

You can click here to read  “The Cure Is Worse Than the Disease: Why the Private Option Will Hurt, Not Help, Arkansas’s Hospitals.”

 

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