More … than 17,000 Missourians applied for Medicaid ever since a judge ordered the state to implement the expansion approved by voters in August. This change could be a boon for hospitals, which often care for uninsured people. Hospital executives are broadly optimistic about the expansion, but the road ahead is not entirely straightforward.
The Golden Valley Memorial Hospital is a 56 bed facility in Clinton. While the western Missouri city has less than 10,000 residents, the hospital serves approximately 80,000 people in the wider region. “We serve a predominantly rural population,” explained CEO Craig Thompson. “If you look at Clinton and draw a 50 mile circle around the hospital, that’s really the people we’re serving.”
Golden Valley and other rural hospitals like this tend to have narrow profit margins. Many patients benefit from Medicare, which pays hospitals less than commercial insurance, and some patients benefit from Medicaid, which pays even less than Medicare. But 10 percent of Golden Valley patients have no insurance to begin with.
“Even though Medicaid is not a good payer and, in many cases, does not cover the costs, covering some of the costs is obviously better than covering no costs,” Thompson said.
Thompson estimates that between 3,000 and 4,000 of the hospital’s patients could be among the 275,000 Missourians newly eligible for coverage. The loss of money for uninsured patients has contributed to the 10 rural hospital closures Missouri has seen in the past seven years.
Research shows that fewer rural hospital closures in states that extend Medicaid.
But Thompson and other hospital executives say they’ve supported Medicaid’s expansion for more than the bottom line. For Steve Edwards, CEO of Cox Health in Springfield, expansion is about serving patients better. “I feel a little elated because I see the struggles,” Edwards said. “When you are in the health care business you see struggles more directly and personally with patients.”
Having Medicaid coverage opens the door for patients to seek preventative care. Edwards argues it’s better for them – and better for the hospital – in the long run. The expansion of Medicaid in a critical area could help: mental health.
“A lot of times people with mental health issues often lose their jobs and their insurance and then go through this really horrible cycle,” Edwards said.
These two elements – patient care and hospital finances – feature high on the list of reasons the Missouri Hospital Association has supported the expansion of Medicaid in Missouri.
But other changes have complicated the outlook for hospitals. One of these developments is the growing adoption of “managed care” in Medicaid. Traditionally, Medicaid has paid providers directly, but in managed care, a private company acts as an intermediary.
Dave Dillon of the hospital association says the problem with managed care for hospitals is twofold; less pay and more bureaucracy.
“Not only do you have an intermediary, who will take part of the state payments for this care, but you also see that the hospitals have more administration because they have to deal with denials of care,” Dillon said.
People who receive care through the expansion of Medicaid in Missouri will be in managed care. Managed care advocates say it’s an opportunity. They say that if managed care is done well, it can benefit patients, hospitals and the state.
Elena Marks is President of the Episcopal Health Foundation, a health-focused nonprofit based in Houston, Texas. She also sits on the board of directors of a managed care organization and believes that managed care can benefit patients if the focus is on optimizing their health.
“There is a certain amount of healing that doesn’t need to be incurred,” Marks said. “And when you’re on a managed care plan, and someone is managing the care and the overall experience, then those things are avoided.”
But Marks recognizes that if a state is only interested in using managed care to cut costs, it can increase friction between providers and care organizations. Missouri is also adjusting the way it pays healthcare providers, which should also reduce hospital revenues. All of this, combined with the lingering threat of a legislature that has already attempted to stop the expansion of Medicaid once this year, is a cause for concern to hospital executives.
Still, Cox CEO Edwards is optimistic about the future of Medicaid’s expansion in Missouri. “It’s a time that gives us joy and hope and knowing that we can serve our community better… so it’s a very meaningful day for all of us in the health field.”
And 11 years since the Affordable Care Act gave states the ability to expand Medicaid, it’s a long day of preparation.