by Admin | June 5, 2015 4:34 pm
Just this morning, someone on Twitter asked: “With ACA, is 340B still needed with uninsured numbers dropping?” A new study from the financial rating firm Moody’s Investors Service helps explain why 340B is, indeed, needed more than ever.
Although public and nonprofit hospital bad debt and charity care trended downward in 2014, the first year of Medicaid expansion under the Affordable Care Act, hospitals in expansion states “are not uniformly transforming lower bad debt expense into higher cash flows and are not reporting financial results that are materially better or different” from those in non-expansion states, Moody’s said in a June 3 report.
Moody’s notes that bad debt in expansion states represented 4.8 percent of median hospital revenue in 2013, the year before expansion, “so big drops in bad debt do not necessarily lead to big improvements in operating performance.”
Also, “reductions in bad debt are being consumed by other expense growth, including salaries and pensions, and strategic investments in population health management,” Moody’s said.
“A reduction in bad debt will not in and of itself result in stronger (hospital) margins,” the report concludes.
Source URL: https://340binformed.org/2015/06/even-with-aca-340b-is-still-needed/
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