Impacts of universal health care coverage on organizations’ revenue
HCA 827 Topic 5 DQ 2
Economic downturn commonly means less time in the hospital and greater demand for other services. How might health care leaders best create steady revenue streams amidst changing service requirements created by fluctuating economic conditions? Why? Can steady and sustainable revenue ever be fully achieved? Why or why not? To what extent does the notion of universal health care coverage influence the stability and sustainability of revenue streams for health care organizations? Why?
ADDITIONAL DETAILS
Impacts of universal health care coverage on organizations’ revenue
Introduction
The California legislature passed a bill in 2017 that expanded coverage to all residents and provided subsidies for low-income families. This is expected to reduce the number of uninsured Californians by 2 million people, which would have an estimated $17 billion impact on the state’s economy. In this study, we estimate the economic impact of universal health care coverage on organizations’ revenue. We focus on safety net hospitals (SNHs), which provide healthcare services for low-income populations at or below 200% FPL but not Medicare or Medicaid beneficiaries. Using data from California’s hospital cost reports and discharge records from SNHs, we find that SNHs facing financial risk as a result of changes in patient insurance source have been forced to cut prices and reduce service quality in order to stay competitive with other providers while still maintaining enough revenue per day/visit so as not to lose business altogether
Safety net hospitals (SNHs) are concerned about the financial risk associated with universal health care coverage.
Safety net hospitals (SNHs) are concerned about the financial risk associated with universal health care coverage. They fear that a decline in revenue and patient volume will result from an increase in their uninsured population, which could have a negative effect on their bottom line.
The SNHs also worry that they may lose patients to other providers if they do not offer a full range of services under this new system.
Data were collected on inpatient and outpatient discharges to SNHs, including data on insurance sources and patient race/ethnicity.
This study analyzed data from a retrospective cohort study of inpatient and outpatient discharges conducted at SNHs in New York State. The study included information on insurance sources and patient race/ethnicity, which were merged with hospital cost reports to determine the impact of changes in coverage status on SNH revenue per discharge.
These data were merged with hospital cost reports to determine the impact of changes in coverage status on SNH revenue per discharge.
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These data were merged with hospital cost reports to determine the impact of changes in coverage status on SNH revenue per discharge.
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In addition, we examined whether there was any correlation between the percentage of total SNH revenues that came from Medicare and Medicaid payments and the number of patients who had been enrolled in Medicare or Medicaid during a given reporting period (or during all years) as opposed to other types of coverage.
Among these patients, Medicare is the largest payer (41%), followed by Medi-Cal (33%), uninsured and other (17%).
The most common payment source for SNHs is Medicare, which accounts for 41% of total payments. Medi-Cal follows with 33%, followed by uninsured and other at 17%.
Private payers account for less than 9% of all discharges from California SNHs and less than 4% of days/visits for Latinos, as compared to 22% for whites and African Americans combined.
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Private payers account for less than 9% of all discharges from California SNHs.
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Less than 4% of days/visits for Latinos, as compared to 22% for whites and African Americans combined.
Conclusion
While there is a wide variation in the extent of coverage across states, there are some clear trends. First, universal health care coverage appears to be reducing hospital revenue as well as overall national spending for health care. Second, expensive-care hospitals seem to be most affected by this trend because their patients are less likely than more cost-effective hospitals’ patients to have insurance. Third, the uninsured population has grown significantly in recent years and will continue growing at a faster pace than the insured population unless steps are taken by policy makers and insurers alike towards better access for all Americans.
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