Dobson | DaVanzo Releases Study for The Commonwealth Fund on Financial Impact of Medicaid Provisions in AHCA on Safety-Net Hospitals

Published Wednesday, June 28, 2017

In a June 2017 study for The Commonwealth Fund, Al Dobson, Randy Haught and Joan DaVanzo estimated the financial impact of the Medicaid provisions in the American Health Care Act (AHCA) on safety-net hospitals. Using the Dobson | DaVanzo Hospital Finance Simulation Model, Medicare Hospital Cost Report data, and assumptions on how states would respond to the AHCA Medicaid provisions, the authors found that beginning in 2020, the financial status of safety-net hospitals could deteriorate as Medicaid coverage is reduced and the per-capita spending limits proposed in the AHCA grow.  In addition, the authors found that small rural safety-net hospitals and safety net hospitals treating large proportions of low-income patients could be hurt the most.  Ultimately, the study shows the strain that would be placed on safety net hospitals due to Medicaid provisions in the AHCA, and indicates that unintended consequences such as hospital closures, cost shifts to Medicare and private insurers and reduced provider payments may be a byproduct of the proposed legislation. The study can be accessed here.