Association for Public Policy Analysis & Management

Panel: Hospital Finance and Medicaid

(Health Policy)

This panel will examine the role that Medicaid plays in hospital finance. Hospitals depend on Medicaid through its role as a payer as well as through the money it provides in direct supplemental payments.  The Affordable Care Act substantially increased the number of potential patients with Medicaid and decreased the number of uninsured, and also contains provisions that intend to phase out some forms of supplemental payments. However, little is known about how hospital finances are affected by these policies. The first paper studies the impact of the ACA Medicaid expansions on hospital Medicaid revenues, uncompensated care, net income, and operating margins, with an emphasis on how these effects vary with the size of the state's expansion. The second paper examines how the ACA Medicaid expansions affected hospital profits, costs, and Medicaid revenues with an emphasis on how these effects vary by hospital type (for example, ownership, size, and metro status).  The third paper examines the types of hospitals in Texas that receive supplementary payments and whether these payments seem to be well-targeted towards Medicaid and uninsured patients using a novel dataset constructed by the authors that connects multiple state sources of data on hospitals. All of the papers emphasize the importance of accurate measurement of hospital finances and provide important evidence on how recent state and national policy has affected the hospital sector.