Thursday, May 15, 2014

Arkansas hospital survey: since enactment of private option, ER visits and number of uninsured patients down

Posted By on Thu, May 15, 2014 at 3:25 PM

click to enlarge EARLY RETURNS: Hospital administrators testify before legislative subcommittee.
  • EARLY RETURNS: Hospital administrators testify before legislative subcommittee.
Preliminary data from a survey of acute care hospitals in Arkansas suggests a dramtic decline in the number of uninsured patients hospitals are seeing since the enactment of the private option, Surgeon General Joe Thompson and Bo Ryall, president of the Arkansas Hospital Association, testified before a legislative subcommittee today. 

The data is based on a survey sent by the AHA to acute care hospitals in the state. Of 83 such hospitals, 42 have thus far responded. The survey was de-identified, though individual hospital administrators may choose to share the data for their hospitals. 

Here are the three key statewide findings, comparing the first quarter of 2014 against the first quarter of 2013 (see after the jump to see the range in results between hospitals):

* The total number of emergency department visits declined by 2 percent.
* Of those who did visit the emergency department, the number of uninsured patients was reduced by 24 percent.
* For people who required hospitalization, the number of uninsured patients was reduced by 30 percent. 

"On all three of these indicators we're going in the right direction to improve the fiscal stability and well-being of our hospitals," Thompson said. "But more importantly we're removing a financial burden for individuals who have needed care." 

"Hospitals are seeing a positive impact from the private option thus far," Ryall said. Ryall testified that Arkansas hospitals are facing $2.5 billion in reductions in Medicare reimbursement rates as part of sequestration and the Affordable Care Act over the next ten years, and had been hit with hundreds of millions of dollars annually in uncompensated costs of treating the uninsured. "The private option won't backfill those Medicare numbers or uncompensated care, but we certainly need the private option for our rural hospitals to survive," he said. Ryall noted rural hospital closings in Georgia and Alabama. "We don't want to see that happen in Arkansas," he said. "We thank you as legislators for passing the private option. We think it's helping your constituents and helping your local hospitals."  

This preliminary data should be viewed with caution — it represents just three months of information covering only half the acute care hospitals in the state. Thompson acknowledged as much, but said that the 42 respondents represented a mix of size and region that was generalizable to the state as a whole (here is a list of hospitals which participated in the survey).  "It represented all corners of the state and sizes of hospitals so we felt it was strong enough to put in front of the legislature because they've been clamoring for more information," Thompson said. 

Also testifying were four hospital administrators (I'll add some more from them in a separate post).

Ray Montgomery
, CEO of White County Medical Center in Searcy, said that the hospital is projecting $66 million in Medicare reimbursement cuts over the next 6 years, and that via the private option the hospital would gain back approximately $15 million. "It's very important and very critical to our survivability as a county saftey-net hospital," he said. Montgomery said that WCMC had looked at data for the first four months of 2014 (only the first 3 months was submitted for the survey) and seen a 50 percent reduction in uninsured ER patients and a 50 percent reduction in uninsured inpatient care versus the first four months of 2013. Montgomery speculated that part of the reason for the dramatic difference was pent-up demand, but put the numbers in context given the increase in coverage in the area. "We're a poor region," Montgomery said. "There are 11,000 additional additional covered lives [via the expansion] in our 6-county region....that really makes sense of what we're seeing." 

Ron Peterson, CEO of Baxter Regional Medical Center in Mountain Home, testified that his hospital is projecting $40 million in Medicare reimbursement cuts over the next six years, and that the private option would offset that hit by $14.6 million. "Thank goodness the private option came about, because that has helped eliminate some of that deficit," Peterson said. He said that through the first four months of 2014, the hospital had seen a 10 percent reduction in ER  visits, a 42 percent reduction in uninsured ER visits, and a 48 percent reduction in uninsured inpatient admissions — as compared to the first four months of 2013. Peterson said that through the end of April, the hospital had gotten $770,000 in revenue from the private option and a directly corresponding decrease in charity care. The hospital was $3.5 million in the red last year; thus far this year they are $485,000 in the black. 

"The difference between us being in the red and us being in the black is the private option," Peterson said. 

Much more detailed information on costs, utilization and outcomes will be available once the state completes its first evaluation report as part of the federal requirements for the private option waiver in the second half of 2015. Again, the hospital survey data is very preliminary, but gives reason for cautious optimism on reducing the burden of uncompensated care for hospitals in the state.

The small reduction in ER use is a notable finding; coverage expansions are often associated with an initial uptick in ER use. “In the emergency department, I believe a lot of individuals come to the hospital ER because they know we’re required to provide care to anybody who comes and we do that,” Peterson said. “I think that the private option has given some people the alternative now that they know they can go to the physician's office and be accepted.” Harry Hutchison, vice-president of finance at St. Bernards Healthcare in Jonesboro added: “The private option allows these people to be covered currently. Previously those patients couldn’t go ... without having dollars. …They’d go into the ER because they have no money. The opportunity now, because they do have insurance, is to work with prevention, getting them identified and building a relationship with a primary care physician so no longer do they have that single option to come to the emergency room, but to go to an established primary care physician, which is so much more cost-effective.” (The private option does not cover non-emergency ER use; one open question is whether that will impact ER utilization versus traditional Medicaid expansion.) 

"I think we are doing well both with respect to the original legislative intent and the re-authorization intent," Thompson said. He said that state officials would present preliminary drafts of amendments to the private option waiver — adding HSAs and establishing cost-sharing for private option beneficiaries between 50 and 100 percent of the federal poverty level — in the next 4 to 6 weeks.  

Rep. David Meeks, who opposed the private option, said that he was skeptical of the findings because only half of the state's hospitals had responded to the survey so far. As far as the preliminary data, he said, "I knew that the private option would help out in the short term, but to me it's about a long-term sustainable program. ...I still think we've got to continue to reform the program if we're going to keep the program."

All of the hospital administrators testified that the private option was vital to their financial stability. "It's essential to our survival right now," Hutchison. "For St. Bernards, it is essential for making ends meet."

After the jump, more information on the survey findings: 

There was a fair amount of variance in findings between hospitals. Of the 42 hospitals which reported, 26 had a decrease in emergency department use; 37 out of 42 had fewer uninsured patients in the emergency room. Here's the range: 

click to enlarge achi_1.png

Of the 42 which reported, 25 had both fewer ER patients and fewer uninsured ER patients. 

click to enlarge achi_3.png

Most of the hospitals reporting also had fewer uninsured hospitalizations, though this is a smaller data set because hospitals having fewer than 10 admissions by uninsured patients in either year were excluded.

click to enlarge achi_2.png

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