The ACA and hospital utilization


Safety net hospitals are often the go-to healthcare resource for low-income and uninsured patients. With the Affordable Care Act equipping more than 16 million Americans with insurance, those hospitals expect to serve more insured patients.

Faculty in the Department of Health Behavior and Policy at Virginia Commonwealth University are studying whether newly insured patients are continuing to choose safety net hospitals, or if they’re going elsewhere now that they have more choices.

Researchers Peter Cunningham, Ph.D., and Lindsay Sabik, Ph.D., are zeroing in on data from California that shows the effect of healthcare expansion on safety net hospitals there. The Golden State launched a Medicaid expansion in 2011, three years before the ACA took effect in most other states.

“California had a fairly high uninsured rate — about 17 percent — before the Medicaid expansion,” Cunningham says. “So we thought coverage expansion was likely to have much more of an impact there than in other states.”

In the 16-month study, Cunningham and Sabik are examining data from state inpatient and emergency department databases and comparing California’s safety net hospitals to those in nearby states that did not expand Medicaid before the ACA.

Cunningham says he expects the data to show that as more people enrolled in Medicaid, fewer uninsured patients were treated at safety net hospitals.

“We expect to see the payer mix of safety net hospitals change, and to see fewer uninsured and more Medicaid patients,” he says.

The study results will also address concerns that an influx of newly insured patients will strain capacity in the healthcare system, sending people to the emergency department because they cannot readily get treatment elsewhere.

Results of the study are crucial for policymakers because the ACA assumes that safety net hospitals will see an increase in patient revenue as they treat more insured patients. Based on that assumption, reductions in Medicare and Medicaid payments to hospitals were originally slated for 2016.

Those reduced payments have now been now pushed to 2018 as safety net providers continue to depend on the revenue to make up the cost of providing care for uninsured and Medicaid patients.

“If that shift to fewer uninsured patients doesn’t happen, it would be an early warning sign that a lot of these safety net hospitals could be at high risk financially once the payment reductions take effect,” Cunningham says.

Peter Cunningham, Ph.D., and Lindsay Sabik, Ph.D., are supported by a grant from the Robert Wood Johnson Foundation’s State Health Access Reform Evaluation Program. For complete details about the study, view our current projects.