An improving economy is one reason that the finances of safety-net hospitals have fared better than expected over the last year, Kaiser Health News reported.
Kaiser Health News evaluated the finances of several safety-net hospitals and hospital systems in Florida, Texas, Georgia, Tennessee, South Carolina, Virginia and Kansas. All those states have refused so far to expand Medicaid eligibility, which in theory mean that their safety-net providers should be struggling financially compared to those in other states that expanded Medicaid under the Affordable Care Act.
Safety-net hospitals already face cuts in reimbursement from the Disproportionate Share Hospitals program, as well as the probability of more financial penalties from Medicare's value-based purchasing and readmission reduction programs. Some safety-net hospitals, such as Enloe Medical Center in Turlock, California, will lose more than 3 percent of their Medicare payments due to penalties, according to the Center for Health Reporting via The Modesto Bee.
However, hospitals and systems in these states that cater to large low-income populations still reported relatively strong numbers, the Kaiser analysis found. For example, Grady Memorial Hospital in Atlanta reported a $30 million profit through November 2014, compared to $17 million during the same period in 2013. Jackson Health System in Miami reported a 2014 surplus of $51 million, about the same as it reported in 2013. Several other systems also reported fairly strong numbers.
Kaiser Health News attributed the relatively strong numbers to a variety of factors. They included individual patients purchasing healthcare coverage through their state health insurance exchanges and an improved economy that boosted property taxes and other sources of revenue that often go directly to publicly-operated hospitals.
However, some sector observers say it's still too early to predict a trend.
"We are still very early in the Affordable Care Act, and one year does not make a trend," Daniel Steingart, an analyst with Moody's Investors Service, warned Kaiser Health News. "Just because they got though this period does not mean they do not have more financial pain to come."