Medicaid Expansion Doesn’t Guarantee a Higher Quality Safety Net Hospital, Study Finds

Evidence suggests that as the Affordable Care Act helped Americans become insured, the shift was positive for individual patients: cancers were caught earlier when they were treatable, and people were diagnosed with diabetes before developing complications, which often were left untreated until patients qualified for Medicare.

But does expanding the Medicaid ranks translate into better quality measures for a safety net hospital? Findings appearing Monday in JAMA Internal Medicine state that Medicaid expansion has not necessarily translated into better quality scores for safety-net hospitals, which care for a larger share of low-income patients. Even in states with Medicaid expansion, safety net hospitals are more likely to care for patients who are uninsured or underinsured.

Historically, these hospitals tend to score poorly on measures such as hospital readmissions and patient experience, and the hope has been that improvements would come with Medicaid expansion and more secure financial footing. The new study from authors at the University of Pennsylvania, using data from the RAND Corporation Healthcare Provider Cost Reporting Information System—along with surveys from the American Hospital Association—shows that having more patients covered by Medicaid didn’t move the needle on key quality measure in the early years after expansion.

Researchers examined quality measures in safety net hospitals in states with Medicaid expansion and those without, both before expansion and in the three years after eligibility was expanded to those earning up to 133% of federal poverty line. They reported no statistically different changes in several key quality measures: patient-reported experience, health care-related infections, readmissions, and mortality.

In their discussion of the findings, the authors said having more patients with health insurance doesn’t instantly wipe out all the challenges that make these facilities safety net hospitals in the first place. “Safety-net hospitals serve patients at high risk for poor outcomes owing, in part, to the layers of socioeconomic challenges they face,” they wrote. “Barriers such as structural racism, housing instability, food insecurity, limited transportation, and lower levels of health literacy or numeracy may increase the risk of readmission and other adverse outcomes.”

Patients at these facilities may have longer wait times, contributing to lower experience scores. The authors state that changes in staffing and discharge planning can improve readmission and mortality rates, but these improvements may still cost more than a safety net hospital can afford, even after Medicaid expansion occurs. Of note, the ACA envisioned that as the share of insured patients increased, other sources of revenue for would ebb.

“Although operating margins improved after Medicaid expansion, [safety net hospitals] SNHs may still have financial challenges. These ongoing challenges may be the result of withdrawals of Medicaid disproportionate-share hospital payments, which traditionally served as bolstering payments for SNHs but were anticipated to be withdrawn in the postexpansion era,” they wrote.

“Bolstering SNHs may require more than just reducing the burden of uncompensated care, and understanding how local and state subsidies are used to support these hospitals is emerging as an area of importance. The CMS might also consider additional funding for SNHs to secure the capital required to improve quality, such as organizational infrastructure and personnel.”