title: Uncompensated Care Decreased At Hospitals In Medicaid Expansion States But Not At Hospitals In Nonexpansion States.
abstract: One pillar of the Affordable Care Act (ACA) was its expected impact on the growing burden of uncompensated care costs for the uninsured at hospitals. However, little is known about how this burden changed as a result of the ACA's enactment. We examine how the Affordable Care Act (ACA)'s coverage expansions affected uncompensated care costs at a large, diverse sample of hospitals. We estimate that in states that expanded Medicaid under the ACA, uncompensated care costs decreased from 4.1 percentage points to 3.1 percentage points of operating costs. The reductions in Medicaid expansion states were larger at hospitals that had higher pre-ACA uncompensated care burdens and in markets where we predicted larger gains in coverage through expanded eligibility for Medicaid. Our estimates suggest that uncompensated care costs would have decreased from 5.7 percentage points to 4.0 percentage points of operating costs in nonexpansion states if they had expanded Medicaid. Thus, while the ACA decreased the variation in uncompensated care costs across hospitals within Medicaid expansion states, the difference between expansion and nonexpansion states increased substantially. Policy makers and researchers should consider how the shifting uncompensated care burden affects other hospital decisions as well as the distribution of supplemental public funding to hospitals.
authors: David Dranove is a professor of strategy at the Kellogg School of Management, Northwestern University, in Evanston, Illinois.
authors: David
authors: D
authors: Dranove
authors: Craig Garthwaite is an assistant professor of strategy at the Kellogg School of Management, Northwestern University.
authors: Craig
authors: C
authors: Garthwaite
authors: Christopher Ody (c-ody@kellogg.northwestern.edu) is a research assistant professor of strategy at the Kellogg School of Management, Northwestern University.
authors: Christopher
authors: C
authors: Ody
mesh_terms: D016208:Databases, Factual; D005260:Female; D017048:Health Care Costs; D018166:Health Care Reform; D017721:Hospital Costs; D006801:Humans; D007345:Insurance Claim Review / Q000191:economics; D008297:Male; D008484:Medicaid / Q000191:economics / Q000706:statistics & numerical data*; D017057:Medically Uninsured / Q000706:statistics & numerical data; D058991:Patient Protection and Affordable Care Act / Q000458:organization & administration*; D017664:Uncompensated Care / Q000191:economics / Q000706:statistics & numerical data*; D014481:United States
keywords: Health Economics; Health Reform; Hospitals; Medicaid