One quarter in, Nashville’s publicly traded hospital operators seem optimistic about the effects of the Affordable Care Act on their bottom lines.
Community Health Systems CFO Larry Cash told investors and analysts during the company’s first-quarter earnings call Wednesday that the ACA should decrease self-pay admissions from about 8 percent to about 4 percent over a three-year period. The company has seen some early moderate impacts, especially in Medicaid expansion states where self-pay admissions have already begun to drop, Cash said.
“We believe we have recognized, although on a roughly calculated basis, at least $10 million from the ‘woodwork effect’ [in which people currently eligible for Medicaid but who had yet to sign up will now do so because of the ACA] and the Affordable Care Act for additional Medicaid business,” Cash said.
Brentwood-based LifePoint was also high on the ACA’s impacts during its first-quarter earnings call last week, with company leadership emphasizing Medicaid expansion’s effects in many of the states where it operates hospitals.
“So far and as expected, the new health care law has been a net positive for LifePoint with respect to Medicaid expansion,” CEO Bill Carpenter said during the call. “In the seven states where we operate that have expanded coverage, we saw increasing Medicaid and decreasing self-pay volumes. Increases in Medicaid membership and health insurance exchange participation contributed measurably to our results in the quarter. While we don’t expect additional states to expand coverage in 2014, we’re optimistic that more conversions will occur over time.”
LifePoint estimated 80 percent of its current self-pay patients in states that have expanded coverage would qualify for Medicaid, CFO Leif Murphy said during the call, and the company has seen about 80 percent of that eligible population enroll, which represents more than 22 percent of the company’s self-pay patients.
HCA was more measured in its response to reform’s early effects, with execs noting that it’s still early in the process, and that only four of the company’s states have expanded Medicaid.
In those states, however, the company has seen Medicaid admission growth and a 29 percent decline in uninsured admissions, compared to a 5.9 percent increase in uninsured admissions in non-expansion sates, CFO Bill Rutherford said during the earnings call.
“It’s too early to take a lot out of the first quarter as an indication of health care reform for the rest of the year,” HCA CEO Milton Johnson said. “I said on the call last quarter that we probably wouldn’t be able to provide a lot or thought about reform until at least the middle of the year when we release second quarter. I think we still reserve that position.”
Date: May 7, 2014