In a sign that the health reform law is beginning to extend coverage to the population that needs it the most, some major safety net hospitals are reporting a sharp drop in the share of uninsured patients they serve. That means those institutions are caring for more people who have insurance, which is ultimately lowering the number of unpaid bills that can hurt their bottom lines.
Safety net hospitals are public institutions that provide health services to all Americans, no matter what they can pay. That means they end up serving a disproportionate number of poor and uninsured people who don’t have any coverage to help foot their bills. So Obamacare’s expansion of the Medicaid program, which helps insure a greater portion of that vulnerable population, represents a significant opportunity to boost their profits.
And that’s exactly what’s happening at several of the nation’s largest safety net hospitals. In Seattle, the proportion of uninsured patients visiting Harborview Medical Center fell from 12 percent last year to just two percent this spring — which the hospital expects to translate to a $20 million boost in revenue. A similar dynamic is unfolding at Denver Health in Colorado and the University of Arkansas for Medical Sciences Hospital in Arkansas, where the number of uninsured patients have been cut in half.
“We did not anticipate this big a drop this quickly,” Roxane Townsend, the CEO of the University of Arkansas for Medical Sciences Hospital, told Kaiser Health News. Townsend noted that the decline in uninsured patients started picking up immediately after the Medicaid expansion took effect in her state.
“This is really phenomenal,” Ellen Kugler, the executive director of the National Association of Urban Hospitals, which represents safety net hospitals in inner cities, added. “It shows the Affordable Care Act is clearly working in these locations.”
Safety net institutions aren’t the only health care providers that have noticed a difference since Obamacare went into effect. So many people have signed up for Medicaid in Arkansas that a free health clinic recently closed its doors, saying that its services aren’t needed anymore thanks to the health reform law. Emergency rooms across the state have noticed a nearly 25 percent drop in the number of uninsured patients. And outside of Arkansas, public hospitals across the country have reported that an influx of newly insured Medicaid patients is helping their bottom lines.
But there’s a flip side to that story. Since the Supreme Court ruled the Medicaid expansion to be optional, not every state is implementing it. And in the states that have resisted this particular Obamacare policy, there have been disastrous consequences for the hospitals serving the poorest communities. Rural hospitals in states like Tennessee, Georgia, Virginia, and North Carolina are being forced to close because they can’t afford to remain operating without the Medicaid reimbursements from the low-income people who would have been eligible for the expansion. These facilities are typically located in areas where vulnerable residents desperately need access to health services.