A new Fitch Ratings report predicts for-profit hospitals could potentially benefit from the Patient Protection and Affordable Care Act this year, although patient volumes declined during the first quarter.
Here are three key things to know about how the PPACA has affected for-profit hospitals so far and how it is expected to impact them going forward, according to the report.
1. The major health insurance coverage expansion provisions of the PPACA that took effect this year — including Medicaid and the health insurance exchanges — didn't seem to boost patient volumes during the first quarter. In fact, the Fitch-rated group of for-profit hospital companies reported a 3.6 percent decline in same-hospital admissions and a 1.4 percent drop in adjusted admissions during the quarter.
2. However, the lack of impact on admissions and volumes isn't surprising, given that enrollment in exchange plans and Medicaid was still "ramping up" during those three months, according to Fitch. The coverage expansion is expected to have more of a discernable effect in the second quarter.
3. Still, Medicaid expansion in states that opted to do so during the first quarter had an "immediate and dramatic" impact on payer mix. The ratings agency states, "In expansion states, hospitals are experiencing strong growth in Medicaid patient volumes and a drop in uninsured patient volumes. Based on only one-quarter of experience under insurance expansion, it is difficult to determine the longer term effect of the payor mix shift, but these early results show the industry could experience a meaningful and durable reduction in the financial headwind created by uncompensated care."
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