September 3, 2014 -- Hospitals in states that expanded Medicaid under the health care law are seeing financial benefits as patients gain coverage, according to a PricewaterhouseCoopers analysis of financial data from the nation's five largest for-profit health systems.
The report documented a major shift away from uninsured patient admissions for the nation's three largest chains: HCA Holdings, Tenet Healthcare and Community Health Systems. In states that expanded Medicaid, the number of hospitalized patients who had Medicaid coverage jumped by 10 percent at Community Health Systems, more than 20 percent at Tenet and 32 percent at HCA. At the same time, the number of hospital patients who lacked coverage and had to pay their bills fell by 46 to 48 percent among the three systems.
A total of 28 states have opted to expand their Medicaid programs under the law (PL 111-148, PL 111-152).
As more revenues flowed in from Medicaid, Tenet officials reported that their hospitals posted a $78 million decline in unpaid medical care. Community Health Systems reported $40 million to $45 million less uncompensated care, adding it expects similar results next year. HCA officials did not quantify the effect over the past year from the Medicaid expansion alone, but the chain updated its earnings to account for higher revenues than expected.
The report also examined the finances of two other major chains–LifePoint Hospitals and Universal Health Services. LifePoint reported a $13 million gain from the expanded Medicaid coverage. Its second-quarter earnings increased almost 36 percent over the same time period in 2013, according to the report.
Universal Health Services said its second-quarter adjusted net income rose 30 percent when compared to the same timeframe the year before.
"In states that have expanded Medicaid, an influx of newly insured patients has helped reverse long-running hospital trends such as declining admissions and a rise in uncompensated care," found the report.