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This election season has seen relatively little campaigning on health care reform. Short of the occasional cry to "repeal Obamacare" or the offhand complaint about how much health care costs, there's been relatively little focus on how reform, of health care in general, must be addressed in the next Presidential administration.

What little news there is seems to focus on the exchanges, as I've noted over at other venues. Almost no attention is being paid to Medicaid, or its expansion as part of the Affordable Care Act. A newly released study in JAMA focuses on how the Medicaid expansion affected hospital finances in the US, though, and it's worth our time. This is Healthcare Triage News.

This episode was adapted from a post Aaron wrote for the AcademyHealth blog. Links to further reading and sources can be found there: http://www.academyhealth.org/blog/2016-11/how-has-medicaid-expansion-affected-hospital-finances

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This election season has seen relatively little campaigning on health care reform. Short of the occasional cry to repeal Obamacare or the off-hand complaint about how much health care costs, there's been relatively little focus on how reform of health care in general might be addressed in the next presidential administration.

What little news there's been has seemed to focus on the exchanges, as I noted here and at other venues. Almost no attention is being paid to Medicaid or its expansion as part of the Affordable Care Act. A newly released study in JAMA focuses on how the Medicaid expansion affected hospital finances in the United States, though, and it's worth our time. This is Healthcare Triage News.

[Intro]

I've made the argument many times before, that Medicaid and the Medicaid expansion have benefits both to recipients and to society at large. This study, however, focused on how the Medicaid expansion affected hospital finances.

It looked at difference between hospitals in states where Medicaid did expand and states where it did not. Researchers used data in fiscal years 2011 through 2014 from the American Hospital Association Annual Survey, as well as data from the CMS's Health Care Cost Report Information System. They employed a multi-variable difference in difference analysis. 

The main outcomes of interest were uncompensated care (both as a total amount and as a percentage of total hospital expenses), as well as Medicaid revenue, operating margins, and excess margins (which are, evidently, an indication of profitability that includes more sources of income than just patient care). 

The 19 states that expanded Medicaid included between 1,200 and 1,400 hospitals (depending on reported outcome), while the 25 states that did not expand Medicaid included somewhere between 2,200 and 2,400 hospitals.

Hospitals in states where Medicaid expanded saw a decline in uncompensated care of 2.8 million dollars on average. They also saw an average annual increase of 3.2 million dollars in Medicaid revenue. Excess margins went up by 1.1%, while operating margins remained relatively steady.

Clearly, hospitals in states that expanded Medicaid saw a significant increase in Medicaid revenue along with decreases in uncompensated care. This translated into improved profit margins compared to hospitals in states without the Medicaid expansion. 

Of course, this is just an observational study, with plenty of caveats. Many things are clearly associated with hospital finances beyond the Medicaid expansion. It's also possible the confounders associated with the political and economic climate in states that chose to expand Medicaid or not could be the real drivers here.

But, as we debate policy as to whether it's worth it to expand Medicaid, it's worth noting that the data arguing it might be bad for hospitals, not only is it lacking, it's somewhat refuted.

[Outro]

Healthcare Triage is supported in part by viewers like you through Patreon.com, a voluntary subscription service that allows you to support the show through your monthly donation. We'd like to thank our research associates, Joe Sevits and Karen Green, and our surgeon admiral, Sam. Thanks Joe and Karen! Thanks Sam! More information can be found at Patreon.com/HealthcareTriage.