Report: Hospitals will save $5.7B on uncompensated care

Hospitals' uncompensated care costs will fall nearly $6 billion in the wake of the Affordable Care Act (ACA), according to a report from the Department of Health and Human Services (HHS).

Hospitals will save $5.7 billion in uncompensated care costs, according to the report, with 74 percent of those savings, or about $4.2 billion, going to states that expanded Medicaid under the ACA. Hospitals in non-expansion states will save as much as $1.5 billion.

"Hospitals have long been on the front lines of caring for the uninsured, who often cannot pay the full costs of their care," HHS Secretary Sylvia Mathews Burwell said in a statement. "Today's news is good for families, businesses and taxpayers alike. It's yet another example of how the Affordable Care Act is working in terms of affordability, access and quality."

More specifically, the report found that:

  • Uninsured/self-pay admission volume is down significantly, especially in expansion states

  • Uninsured/self-pay emergency department visits fell substantially in the same states

  • Hospital admission volumes for Medicaid patients are up, but only in expansion states

"This has important implications for hospitals' future financial performance as public and private insurance continue to expand and as levels of federal reimbursement for [uncompensated care] are reduced through cuts in DSH [disproportionate share hospital] payments," the report states. DSH cuts, which Medicaid expansion was poised to offset, will hit providers in non-expansion states particularly hard, FierceHealthcare previously reported.

A May report found hospitals provided about $44.6 billion in uncompensated care in 2013, nearly 60 percent of the $74 billion in total uncompensated care, according to FierceHealthcare, although this represented a slight drop from the projected $45.9 billion they spent on uncompensated care in 2012.

To learn more:
- read the report (.pdf)
- here's the statement