The full implications of the Affordable Care Act aren't yet known, but an early study is already showing one big change in states that chose to accept the Medicaid expansion portion of the overhaul — including Colorado.
The Colorado Hospital Association looked at data from 465 hospitals in 30 states, 15 that expanded Medicaid and 15 that opted out. (Colorado was among 26 states, and the District of Columbia, that chose to expand Medicaid with major subsidies from the federal government. It was included in the study.) CHA found that in the first quarter of 2014, hospitals in states that expanded Medicaid saw 29 percent growth in the volume of Medicaid charges, compared to the year before. Similarly, when compared with the first quarter of 2013, hospitals in opt-in states also saw an average drop of 30 percent in charity care and a 25 percent drop in self-pay charges.
Chris Tholen, CHA's vice president of financial policy, says the study determined that the trend is as simple as it looks: People who were going to the hospital without insurance are now on Medicaid.
In Colorado, the numbers are even more striking. The report notes, "Across the state, total Medicaid charges for Colorado grew 37 percent, while total self-pay charges dropped by 27 percent from first quarter 2013 to first quarter 2014."
According to local hospitals, the trend is playing out in Colorado Springs, but not at the rate seen statewide. In its previous fiscal year (which ended June 30, 2013), Penrose-St. Francis Health Services spokesperson Chris Valentine says, the organization spent $124 million on charity and uncompensated care. In the first quarter of this year, charity care was down (though he wouldn't say by how much) and the system saw 12 percent more Medicaid patients.
Melissa Blevins, spokesperson for Memorial Hospital, says that in the fiscal year ending June 30, Memorial spent $188.6 million on uncompensated care. In the first quarter of 2014, the system saw 4 percent fewer inpatients and 2 percent fewer outpatients who were enrolled in the state's indigent care program. Meanwhile, the percent of Memorial patients enrolled in Medicaid increased by 6 percent across the board.
All of this might seem like great news for the hospitals, because more bills are being paid. In fact, one might wonder if Colorado could soon see lower health care costs due to the increase in paid customers. But sources consulted for this story all said it's not that simple.
"While this shift toward Medicaid is a slight improvement for us and for our bottom line, it still does not cover what it costs to provide this care," Memorial Hospital-University of Colorado Health CEO George Hayes told the Independent in an email.
Valentine said simply, "It's very complicated."
Consider for instance, that while Medicaid pays hospitals, it doesn't cover the full cost of services. And once people get Medicaid, they may visit the doctor more often. Experts also told the Indy that the federal government has decreased subsidies for charity care to hospitals because of the expansion of Medicaid.
Bottom line: Local hospitals say they are monitoring the trends, but can't promise any price cuts yet.