Forbes analysis missed the mark on Medicaid expansion

Expansion is about getting patients the right care, at the right time, in the right place


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The analysis published in a recent online Forbes magazine article – "Report: If New Hampshire Expands Medicaid, State Hospitals Will Lose Hundreds of Millions of Dollars” – misinterprets the Lewin Group analysis on the impact of expanding Medicaid to New Hampshire's hospitals and greatly misses the mark on what Medicaid expansion is all about.

Right now, there is an uninsured patient sitting in an emergency room in New Hampshire that would be eligible for coverage if our state chooses to expand Medicaid coverage under the Affordable Care Act. They are there because they did not have the ability to see a primary care provider to care for them, and they have waited until their illness has become a crisis and they have turned to their local hospital emergency room for care.

Our hospitals treat all patients with great compassion and care, and will continue to do so, but we need to find ways for these patients to get the right care, at the right time, and in the right place -- not the hospital emergency room, but from a primary care provider.

The Forbes analysis suggests that hospitals would be better off if we choose not to expand Medicaid in New Hampshire and claims that hospitals would lose $228 million in revenue over seven years (roughly $45 million each year) as a result of expansion. But let's understand what the Lewin report says: Net revenues for hospitals would go up under both scenarios, $113 million if Medicaid is expanded and $158 million if we do not.

In other words, revenue is going up regardless, but Lewin believes, based on its model of estimation, that revenue will go up more if we choose not to expand Medicaid.

The fundamental assumption that drives that view is that hospitals would be reimbursed at higher rates by private insurers than by the Medicaid program. As a result, private insurers pay higher reimbursements to providers that help to offset those lower reimbursements as well as those who have no insurance.

It is no secret that Medicaid pays hospitals and providers much less than the cost of providing their care, but the assumption that private insurers will continue to pay providers at the current rates is not at all what our hospitals are experiencing. In fact, Moody's Investor's Service recently reported that hospital revenue growth is declining in part because private insurance reimbursements are falling.

Additionally, we understand that private plans are currently negotiating reimbursement levels with providers that will be offered on the marketplace in New Hampshire at rates that are significantly below current rates. As a result, net revenues for hospitals would be far less than that projected by the Lewin analysis should we choose not to expand Medicaid.

In the end, this is about getting patients the right care, at the right time, in the right place. Expanding Medicaid is the right thing to do and we strongly encourage the state to move forward to do just that.

Steve Ahnen is president of the New Hampshire Hospital Association.


 

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