Research roundup: Despite some cuts, hospitals will benefit from Medicaid expansion; Medicare's rising costs propel efforts to revamp the program

Published on March 30, 2013 at 3:26 AM · No Comments

Each week, KHN reporter Alvin Tran compiles a selection of recently released health policy studies and briefs.

Urban Institute/Robert Wood Johnson Foundation: The Financial Benefit To Hospitals From State Expansion Of Medicaid – The authors write that, because of the health law's expansion of Medicaid coverage to adults making below 138 percent of the federal poverty level, "hospitals' public insurance revenue [will create] a larger Medicaid coverage pool. At the same time, it will mean some people currently paying for private coverage will drop it and enroll in Medicaid, resulting in lower payments when they receive hospital care." While the additional Medicaid revenue will offset some of the uncompensated care they now provide, the federal "disproportionate share hospitals" payments that currently helps cover those uncompensated expenses will be reduced. Still, after analyzing these changes, the authors write: "Put simply, a Medicaid expansion increases the number of patients for whom hospitals are paid, but some patients shift from private to more poorly reimbursed public coverage. The net result of these two factors greatly favors hospitals. Altogether, for each dollar in private revenue that a Medicaid expansion eliminates, hospitals' Medicaid revenue rises by $2.59" (Dorn, Buettgens, Holahan and Carroll, 3/19).

The Heritage Foundation: Medicare's Rising Costs – And The Urgent Need For Reform – "The rising cost of Medicare is placing an increasing burden on current and future taxpayers, as well as exacerbating the poor financial condition of a program on which America's seniors depend in their retirement," the authors write. They add that the traditional fee-for-service payment system encourages an increase in the number of services requested, ultimately contributing to excessive spending. In this report, the researchers examine why rising costs, among other factors, support the political efforts to reform Medicare. "Congress and the Administration should undertake short-term reforms of traditional Medicare that will contain costs, while transitioning, prudently but quickly, to a more effective system that will not only control costs over the long term, but will also provide high-quality health care to a rapidly growing Medicare population," they conclude (Moffit and Senger, 3/22).  

Center For Studying Health System Change/The Kaiser Family Foundation: Medicare Spending Limits: Issues And Implication – According to this brief, "Some experts have argued for a change in law that would bring Medicare spending growth in line with growth in the economy, and advocate for a limit on Medicare spending growth." The author adds, however, that "there is little consensus as to how tight the limit should be, how it should be enforced, and whether the limit should apply just to Medicare, all federal health care spending, or even total health spending, including public and private payments." He analyzes various approaches to setting and enforcing limits on Medicare spending while also examining the effects of proposed spending (White, 3/26).

Urban Institute/Robert Wood Johnson Foundation: Uninsured Veterans And Family Members: State And National Estimates Of Expanded Medicaid Eligibility Under The ACA – According to the authors, just over a half million U.S. veterans have incomes below 138 percent of the federal poverty level (FPL), making them eligible for Medicaid coverage under the efforts of the health law to expand Medicaid. But that expansion is voluntary for states and many have expressed reluctance to go along, even though the federal government will pay the total cost of the additional beneficiaries in the beginning of the program. In states that do not expand, residents with incomes between 100 and 138 percent of the FPL could still get help through federal tax subsidies to buy private policies on the exchanges, or insurance marketplaces, being set up in each state. "Most of these uninsured-;414,000 veterans and 113,000 spouses-;have incomes below 100 percent of FPL, and will therefore only have new coverage options under the ACA if their state expands Medicaid," the authors write. "However, fewer than half live in states in which the governor supports their state participating in the expansion, while the majority live in states that have chosen not to expand Medicaid or have not yet decided whether to expand." The authors conclude that "as is the case for the rest of the nonelderly uninsured, the Medicaid expansion could help address coverage gaps for veterans and their family members in many states" (Haley and Kenny, 3/25).

Here is a selection of news coverage of other recent research:

NBC News: Hospital Deaths Declined Just A Little Over 10 Years, Report Finds
The number of people who died in the hospital has fallen just 8 percent over 10 years, despite a big emphasis on letting people die in hospice or even at home, new federal statistics show. And a lot of the decrease appears to be from an overall drop in many types of death, the new report from the National Center for Health Statistics shows. … The study found another trend – deaths in the hospital from sepsis, an overwhelming immune response to infection, rose 17 percent over those 10 years. Other data shows sepsis cases overall more than doubled over that time (Fox, 3/27).

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