Medicaid payment cuts and uncompensated care hit hospitals in Missouri and Pennsylvania hard, prompting many organizations to slash services and staff positions.
Neither state expanded Medicaid eligibility as part of the Affordable Care Act; Pennsylvania may do so next year, but Missouri has no such plans. As a result, hospitals in those states face disproportionate share hospital (DSH) payment cuts without Medicaid expansion making up the shortfall. Missouri, for example, expects to lose at least $400 million a year.
Charity care expenditures have increased by 32 percent since 2010, and hospitals in the state provided $1.2 billion in uncompensated care in 2012, according to the Missouri Hospital Association (MHA). "These pressures are a significant factor in hospitals' decisions to reduce their workforce, delay or cancel capital investments and reduce services," the MHA stated in a fact sheet entitled "Cuts Have Consequences."
As a result, 41 hospitals laid off 998 employees, according to the fact sheet, and 49 hospitals froze the equivalent of 2,145 positions. Another 37 hospitals have delayed or canceled capital projects. Eight of those projects include spending levels of more than $5 million, and eight others include spending of between $1 million and $5 million.
In Pennsylvania, two-thirds of hospitals have hiring freezes, nearly half have laid off staff, half have delayed capital projects and more than 40 percent have cut services, according to a survey by the Hospital & Healthsystem Association of Pennsylvania (HAP).
"Pennsylvania hospitals confront a changing and uncertain healthcare environment, mounting federal payment cuts and an economy that is still struggling," said HAP Chief Executive Officer Andy Carter. "As hospitals work to transform the delivery system, they need stability in federal Medicare and Medicaid payments in order to make needed improvements without jeopardizing Pennsylvanians' access to healthcare."
Missouri and Pennsylvania's woes reflect what is happening to hospitals across the country. DSH payments to some facilities were the reason those organizations operated in the black instead of the red.
Not every hospital in the Keystone State struggles financially; many of the hospitals in western Pennsylvania were profitable in the past year, Trib Live reported, although hospital officials indicate they do not believe the trend will last.