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 Medicaid typically pays less than what it costs a hospital to
provide service, the authors write, and U.S. hospitals lost $14.1
billion in 2014 from Medicaid underpayment. Federal Disproportionate
Share Hospital payments (DSH) are designed to compensate hospitals
that cover uninsured or Medicaid insured patients, but as the
Affordable Care Act reduces the number of uninsured people in the
U.S., DSH payments are scheduled to be reduced annually by $2
billion in 2018.
More than a third of U.S. children are insured by Medicaid,
according to the authors of the study.
“It’s a bit surprising how much money children’s hospitals lose from
caring for children with Medicaid,” said lead author Dr. Jeffrey D.
Colvin of Children’s Mercy Hospitals and Clinics at the University
of Missouri in Kansas City.
Financial records from children’s hospitals from around the country
showed that half the institutions were losing more $40 million
dollars a year, he said.
The researchers used hospital discharges of Medicaid-insured
patients age 20 and younger from 23 states in 2009 from teaching
hospitals, nonteaching hospitals, children’s hospitals within larger
hospitals, and freestanding children’s hospitals.
Freestanding children’s hospitals had a higher median number of
Medicaid insured discharges than teaching hospitals and nonteaching
hospitals: more than 4,000 compared to less than 1,000 for
non-children’s hospitals.
Freestanding children’s hospitals also took the biggest financial
loss, more than $9 million per hospital from March to September of
2015. Teaching hospitals and non-teaching hospitals lost $200,000
and $28,000 over the same period. DSH payments made up for about
half of Medicaid losses for freestanding children’s hospitals, the
research team reported in JAMA Pediatrics.
“The overall financial position of any hospital will depend on their
percentage of patients with Medicaid insurance, their commercial
reimbursement rates, and other ways in which they recover
uncompensated costs, such as philanthropic donations or federal
safety-net hospital subsidies,” Colvin told Reuters Health by email.
“For any hospital that operates very close to the margin - whether
it’s a children’s hospital or a non-children’s hospital - the scope
of under-compensated or uncompensated care is extremely important
and may determine whether the hospital is financially viable or
not.”
Most children’s hospitals try to serve children in need of medical
care regardless of insurance coverage, he said.
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“But hospitals’ ability to continue to absorb these losses in any
kind of sustainable way really does then rely on things that are
somewhat outside of their control (such as) their commercial
contracts, philanthropy, and state and federal subsidies,” he said.
Americans should be aware that Medicaid - one of the most critical
and effective lifelines for children that exists in this country -
is drastically underfunded, Colvin said.
“What parents and families can do is use the Medicaid coverage they
have to make the most of primary care their children have access to,
as a way to prevent serious illness and injury that would require
hospitalization,” said Dr. Matthew M. Davis of the Feinberg School
of Medicine at Northwestern University in Chicago who coauthored an
editorial alongside the new findings.
“The priority for an ill or injured child in a parent’s mind is to
find the best care they can at that moment,” Davis told Reuters
Health by phone. “The last thing parents want to worry about is who
is going to pay for that healthcare when they’re very worried about
their child.”
The ACA has increased insurance coverage in the U.S., but largely
for adults rather than children, he said. The proposed reduction in
DSH payments has already been delayed once to 2018, and could
feasibly be delayed again or changed in future, he said. One option
would be to prioritize DSH payments in particular for hospitals that
care for the most children.
“National Medicaid serves as a major source of healthcare and
hospital coverage for children, with children making up 50 percent
or more of all the enrollees in Medicaid programs,” Davis said.
“Just as Medicare is central to supporting healthcare of seniors,
Medicaid is central to supporting the healthcare of children.”
SOURCE: http://bit.ly/2czJG8L and http://bit.ly/2cEaPo4 JAMA
Pediatrics, online September 12, 2016.
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
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