When more insured patients are not enough

Hospitals continue to cut jobs despite expected influx
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Many hospitals are in the paradoxical position of cutting jobs while their percentage of insured patients increases, JC Online reports.

For example, in Indiana, IU Health announced plans in October to cut 900 jobs statewide by this month, in addition to closing its Arnett urgent care center. Meanwhile, Franciscan Alliance, which serves patients in Indiana, as well as Illinois and Michigan, laid off 275 employees the same month, citing lower reimbursements, the Affordable Care Act (ACA) and changes in employee healthcare plans, according to the article.

IU Health and Franciscan Alliance, along with Indiana's St. Vincent Health, have cut about 2,000 jobs this year, FierceHealthcare previously reported.

There is no single explanation for the apparent paradox of job cuts amid a flurry of new customers, according to Brian Tabor, vice president of government relations for the Indiana Hospital Association.

"There are several things going on at once," he told JC Online. For instance, he said, hospitals are struggling with shifts in the healthcare market and reduced reimbursements. Furthermore, he said that if the Hoosier State fails to expand Medicaid, the problem will worsen. Medicare reimbursements to Indiana hospitals are expected to drop nearly $4 billion over the next 10 years as a result of the ACA.

IU Health Arnett, meanwhile, will see further cuts, due to its status as the state's largest recipient of disproportionate share (DSH) payments, which are due to be cut in half from about $3 million a year because of an expected increase in insured patients.

Healthcare leaders worry that the influx of newly-insured patients will not offset the cuts in reimbursement and stabilize hospital services and employment, according to the article.

Medicaid expansion in Indiana could cut the number of uninsured in the state nearly in half, according to data from the Urban Institute and the Kaiser Commission on Medicaid and the Uninsured, but Republican Gov. Mike Pence only supports the expansion of Indiana Care, a Medicaid demonstration project, FierceHealthFinance previously reported.

To learn more:
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