Unaddressed uncompensated care hurting hospitals

The federal Health Insurance Exchanges opened yesterday, amid much anticipation and less than stellar results. The website encountered glitches throughout the day, and the Centers for Medicare and Medicaid declined to say if any Arizonans even managed to get signed up. While it remains to be seen if the exchanges will have any impact on coverage or affordability, one policy that we know is putting downward pressure on health care costs is the plan to combat uncompensated care by restoring Arizona’s Medicaid program.

 

In states that chose not to address the increasing costs of uncompensated care, hospitals are seriously feeling the burn. In Ohio, the Cleveland Clinic has been forced to cut $330 million from its budget, resulting in an unspecified number of employee layoffs. Vanderbilt University Medical Center in Tennessee was forced to cut $250 million and 1,000 jobs, citing failure of the state to expand Medicaid as a reason. And just yesterday, Grady Memorial Hospital in Atlanta announced that it would come up $45 million short this year as a result of Georgia’s failure to expand. And municipal bonds sold by hospitals and health-care systems in sates that aren’t expanding Medicaid have been posting some of the stock market’s biggest losses.

Meanwhile, Arizona hospitals that have issued bonds within the past two months saw the yield penalty drop as much as 37 percent. Communities in rural Arizona maintain their access to emergency care as hospitals are more fiscally stable as a result of the Medicaid restoration.  And, in addition to supporting jobs and maintaining the state’s healthcare infrastructure, Arizona can expect a boost in employment and economic activity in other sectors of the state’s economy as well.

As the federal government fails to pass a budget and successfully open the exchanges on time, we are lucky to have leaders in Arizona who are enacting commonsense reforms to put downward pressure on the cost of healthcare, keep our hospitals financially healthy, and continue to spur economic growth in our state.