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More than one-third of hospitals statewide lost money in 2013. More than half of the state’s hospitals had profit margins lower than 4 percent for the year, the threshold for sustainability, according to the Pennsylvania Health Care Cost Containment Council.
It’s a trend that likely will continue statewide through 2014 and beyond, and, with that, the Corbett administration should abandon its resistance to the Affordable Care Act’s expansion of Medicaid.
The losses have multiple causes, but one key driver is the rising cost of uncompensated care – treatment for patients who have no private or public insurance and cannot pay.
According to the council, known as PHC4, Pennsylvania hospitals provided more than $1 billion in uncompensated care in 2013, a 5 percent increase over 2012.
Gov. Tom Corbett foolishly has rejected a portion of the federal health care law which, in other states that have accepted it, has begun to diminish levels of uncompensated care and provide hospitals with much-needed revenue.
Under the ACA, the federal government pays 100 percent of the cost of Medicaid expansion to cover uninsured low-income workers in the first two years and covers 90 percent of the cost thereafter.
It’s an extraordinary deal for states. In Pennsylvania, it would have pumped about $17 billion into the health care economy through 2019, including about a $1.6 billion direct reduction in the amount of uncompensated care. That reduction likely would be higher because many people now receiving treatment at hospitals would have insurance enabling them to see other providers first.
Mr. Corbett has sought a federal waiver for a hybrid plan he has devised that would funnel federal dollars through private insurers. But even if that is approved, money that could have gone to providers this year has been lost.
The administration should abandon its plan and approve the Medicaid expansion. Meanwhile, the issue should be a major one in the impending gubernatorial campaign. Democratic nominee Tom Wolf should vow to make participation in the ACA Medicaid expansion one of his top priorities.
Agencies/Canadajournal
