Medicaid expansion helps Chicago hospital system's budget woes

The expansion of Medicaid eligibility and funding under the Affordable Care Act (ACA) will likely smooth over any financial bumps Cook County's large healthcare system may encounter over the next year, the Chicago Tribune reported.

Indeed, Cook County's Health and Hospitals System's budget will actually rise from the expected $1.41 billion by 9 percent. By the end of the fiscal year in late November, the system--which operates two safety-net hospitals and a network of outpatient clinics--will spend about $300 million more than originally budgeted due to the Medicaid expansion.

That additional spending will provide care for a surge of enrollees in the county's Medicaid program. Medicaid enrollment countywide is close to 100,000, according to the Tribune. Officials expect some 40,000 county residents will receive coverage.

Despite miscalculating how many people would enroll in Medicaid, the additional funds from the federal government will actually help the health system's budget. About $164 million will come out of county taxpayer funds for allocation to the healthcare system, down from $175 million in the current fiscal year. The county's overall budget gap will be cut from $169 million to $108 million, all as a result of the additional Medicaid funding.

Cook County's rising fortunes are in contrast to county healthcare systems in Florida, a state that did not expand Medicaid. As a result, the state government must shift more program-related costs to the county level as a result of the squeezed funding.

The strengthening of Cook County Health System's financial position represents a turnaround from earlier this summer, when a newly appointed chief executive officer was immediately charged with finding $67 million in savings. The system has looked for savings in a variety of areas, including promoting the use of cheaper preventive care with its patients and mailing pharmaceutical prescriptions quarterly rather than monthly, which greatly reduces affiliated shipping costs.

To learn more:
- read the Chicago Tribune article