Published by: Obaid Zaman on 5/31/2011 2:44:08 PM
A new study was recently released by NAPH revealing some of the interesting trends that have affected NAPH members over the past decade and what they mean for safety net hospitals as health reform is implemented. The study examined data collected as part of the NAPH Annual Members Characteristics Survey from 2000 to 2009 and was the subject of a webinar that is currently available on the NAPH website.
Here are the key findings that came out of this study:
Growing Demand and Capacity Considerations
The study showed that the demand for services at NAPH members has increased steadily over the ten-year period. For example, inpatient discharges increased by 14 percent between 2000 and 2009. This increase was significantly higher than the 9 percent increase seen at all U.S. acute care hospitals. However, it was shown that the patient capacity of NAPH member hospitals grew at a slower rate than this demand for inpatient care since the number of staffed beds at NAPH member hospitals increased by only 7 percent over same period. As a result, NAPH members had to be more efficient in their delivery of care as indicated by the drop in the average length of stay at member hospitals from 6.1 days in 2000 to 5.6 days in 2009.
Changing Trends for the Uninsured and Medicaid Patients
According to the study, NAPH members cared for increasing numbers of low-income patients, which included those covered by Medicaid and those without insurance. The study also reveals a shift in the insurance coverage of the low-income population whom NAPH members served, where a greater percentage of low-income patients were covered by Medicaid and fewer were classified as uninsured. The decrease in uninsured discharges may be attributed to several factors. One factor is that as the U.S. economy has experienced recession and periods of slow economic growth over the past decade, the number of people eligible for and enrolled in Medicaid has increased. Another factor to consider is that a number of NAPH members have implemented better systems to screen patients for eligibility and enroll them in Medicaid.
The Importance of Safety Net Financing
This study also illustrated the important role of supplemental payments like Medicaid Disproportionate Share Hospital (DSH) and Upper Payment Limit (UPL) payments for NAPH members. NAPH members faced fluctuations in these payments over the period of the study, which had a direct effect on the financial health of the hospitals. From 2000 through 2003, as Medicaid DSH and UPL payments remained relatively unchanged as a percentage of hospital operating revenues, NAPH members struggled with negative operating margins between -2 and -1 percent, on average. In 2004, when supplemental payments for Medicaid began to increase, member hospitals experienced increasingly positive operating margins, reaching as high as 5 percent on average in 2007. When Medicaid DSH and UPL funding was again reduced starting in 2008, NAPH members saw their average operating margins fall back below zero.
During the webinar discussing this new study, some members shared insights about their own experiences over the past decade. Dr. Roxanne Townsend, the Assistant Vice President for Health Systems at LSU Health Care Services Division, explained how recent state budget issues have led to her system to develop unique partnerships with both public and private hospitals to help maintain safety net financing through the Medicaid UPL program, a critical component to the operations of the LSU hospitals. Ms. LaRay Brown, Senior Vice President at New York City Health and Hospitals Corporation pointed out how Medicaid DSH and UPL payments represented about 30 percent of her system’s budget and worried about the effects that planned cuts would have. Both of these speakers also expressed concerns about the effects of health reform. Dr. Townsend feared Medicaid expansions would strain her system’s already limited ability to provide specialty care services to low-income patients. Ms. Brown, wondered how Medicaid restructuring options in terms of Maintenance of Effort issues and block granting would end up playing out at the federal level.
The findings from this study have immediate implications for NAPH members under health reform.
Some of these implications include:
- While health reform legislation includes some provisions to improve primary care capacity, policymakers will need to take steps to ensure that safety net systems have adequate financing to increase both primary and specialty care capacity to meet the demands created by expanded coverage.
- NAPH member hospitals should take advantage when Medicaid coverage expands. With advanced screening and enrollment systems in place, member hospitals will be particularly well suited for enrolling the newly-eligible. NAPH members also have the advantage of having services tailored to suit the particular needs of Medicaid patients, many of whom need accommodations such as language services to effectively meet their health care needs.
- It is critical that policymakers pay careful attention to the adequacy of payments to safety net under health reform, either through supplements, increased Medicaid reimbursement, or facilitating safety net participation in demonstration projects so these providers who continue to ensure access to care will be there for patients who need it.