Uncompensated care in Arizona plummets, hospital margins rise

After months of political battles to expand Medicaid eligibility, Arizona hospitals are finally reaping the benefits: a dramatic drop in the level of uncompensated care.

The levels of uncompensated care statewide dropped 31 percent during the first four months of 2014, compared to the same time period a year ago, according to the Arizona Daily Star.

According to a survey of member hospitals by the Arizona Hospital and Healthcare Association (AHHA), the amount of care written off for charity purposes totaled $170 million for the first four months of the year, compared to $246 million a year ago. At some hospitals, such as Tucson Medical Center, the amount of uncompensated care dropped by 45 percent.

"We had an active campaign here as a community of hospitals in Tucson, and I'd say we're guardedly optimistic," said Judy Rich, Tucson Medical Center's chief executive officer and chair of the AHHA's board of directors.

Meanwhile, the AHHA said that reporting margins for the state's hospitals rose from an average of 4 percent to 5.2 percent, an increase of 30 percent.

The numbers reflect a prediction made by Moody's Investors Service last year that the number of self-pay patients in Arizona would drop off dramatically if the state expanded its Medicaid program.

Medicaid expansion in Arizona ended several difficult years for the state's hospitals. In 2011, childless adults were frozen out of enrolling in Medicaid in order to save money. That population has increased by nearly 2.5 times with the advent of the Affordable Care Act.

The expansion of Medicaid had been vigorously opposed by many of Arizona's Republican lawmakers, which dominate in the state, and several have filed a lawsuit to try to kill the initiative. Republican Gov. Jan Brewer brokered a plan that allowed Medicaid coverage up to 133 percent of the federal poverty level, and assessed an annual fee on the state's hospitals to help pay the state's share of the costs. The state's hospitals have contributed about $75 million so far this year, according to the Daily Star.

To learn more:
- read the Arizona Daily Star article