MI hospitals say Medicaid expansion will benefit bottom lines

Hospital executives in Michigan are optimistic that the state's recent decision to expand Medicaid will help them with their balance sheets, the Detroit Free Press reported.

According to the Free Press, the state's larger hospital systems expect to recoup 10 to 15 percent of their traditional annual losses for uncompensated care. Henry Ford Health System, for instance, expects to save about $30 million. It spends about $230 million a year on uncompensated care.

Laura Appel, a vice president with the Michigan Hospital Association, told the Free Press that the expansion of Medicaid is "a pretty big deal."

State lawmakers passed a Medicaid bill late last month after months of debate. It is expected to expand coverage to an additional 470,000 residents, with coverage subject to higher premiums or a move to the insurance exchange after four years.

However, not every hospital expects to report a gain. Spectrum Health System in Grand Rapids expects costs associated with treating Medicaid patients to rise by $21 million a year. That's primarily because Michigan's Medicaid program recoups only 76 cents for every $1 spent in the hospital setting.

The gain in Medicaid revenue is also expected to offset an influx of uninsured patients seeking treatment in the hospital emergency rooms. Once enrolled in Medicaid, many patients are expected to seek less costly care through primary care physicians, reported the Advisor & Source, and ultimately shrink the volume of money-losing patients at the inpatient level.

To learn more:
- read the Free Press article
- here's the Advisor & Source article

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