Here's what Medicaid expansion would mean for Missouri health care providers
If Missouri voters approve Medicaid expansion on Aug. 4, patients will almost certainly see the most direct benefit.
More than 200,000 Missourians, many of them currently uninsured, would become eligible for state-run health care coverage.
But there will also be substantial impact on providers treating those patients and billing Medicaid.
Unsurprisingly, nearly every major health care organization in the state has come out in support of expansion.
CoxHealth CEO Steve Edwards says it's not only the right thing to do for patients, but the smart thing to do for Missouri's struggling rural hospitals and local economies.
"Even if you're a conservative person, this should make sense to you," he said. "Any time we have a scenario where we can help more people, it seems like a no-brainer to me."
Ahead of the Aug. 4 vote, the News-Leader is reviewing what expansion would mean for patients, providers, and taxpayers covering most of the cost.
A story published Monday reviewed research showing patients would indeed have better access to care, see their financial health improve, and in some cases, add years to their lifespans.
The impact on providers may offer more good news: research suggests expansion would boost providers' financial health, especially for struggling rural hospitals, and potentially add jobs in local economies.
Expansion's most direct impact for providers will be financial.
Research shows expanding Medicaid eligibility leads to more people with health care coverage, who will be more likely to be able to pay for services.
And for hospitals, that would mean taking fewer losses treating low-income patients.
A 2017 study by the Commonwealth Fund found that for every dollar of uncompensated care hospitals in expansion states were providing in 2013, Medicaid expansion erased 41 cents by 2015.
Other research found encouraging signs in the emergency room, where costs are high and federal law requires treatment regardless of a patient's ability to pay.
A 2018 study published in the Annals of Emergency Medicine found ERs in expansion states were reimbursed 6.3 percent more per visit than those in non-expansion states, at least partially because fewer patients were uninsured.
For many urban hospital systems in Missouri, CoxHealth and Mercy included, uncompensated care is part of the business model. As nonprofits, providing millions of dollars worth of "charity care" each year is how they keep their tax-exempt status.
But leaders of both systems said last week that expansion would steer patients away from the expensive ER, allow them to invest more in primary care and potentially lower the costs for everyone.
"If we can invest in primary care with Medicaid expansion," Cox CEO Edwards said, "we can lower the cost to the entire system."
Expansion might mean a lot more than that at hospitals like Cedar County Memorial in El Dorado Springs, where 20 percent of ER patients are uninsured.
Jana Witt, the hospital's CEO, wrote in an email that expanding Medicaid and making other operational changes could help "keep the doors open."
"If Medicaid expansion fails to pass, it will make the financial challenges faced by rural hospitals all the more difficult," she wrote.
Tim McBride, a health care economist at Washington University in St. Louis, said that's a common concern in rural hospitals in non-expansion states.
Most hospitals are running on fairly slim margins. And while a 3 or 4 percent profit margin in a big urban network can still amount to billions of dollars, rural hospitals have no such cushion.
They also are less likely to perform as much lucrative elective surgery as urban hospitals, and their patients tend to trend older and lower-income, so they're more likely to need a hospital and less likely to be able to pay.
If Medicaid could help cover more of the cost for those patients, McBride said, it could mean the difference between "breaking even and hosting board meetings in which people say 'We can't do this forever, we've got to close our doors.'"
That almost happened at Barton County Hospital in Lamar.
When its leader contacted CoxHealth for help a few years back, Edwards, the Cox CEO, said they had about five days of cash on hand and didn’t know how they were going to make payroll.
Cox stepped in and helped out, but at least nine other hospitals haven't been so lucky in the last six years, according to the Missouri Hospital Association.
Additional research says Medicaid expansion is a big reason why.
An analysis of national data by the Chartis consultancy's Center for Rural Health found that being in an expansion state reduced the likelihood of closure by 62 percent, on average.
Strengthening hospitals may have impacts beyond the bottom line and maintaining access to care.
For example, many rural hospitals are the largest employers in their areas.
Ozarks Medical Center in West Plains is the largest employer in the city and one of the biggest in an eight-county area.
“We are the biggest economic driver in these rural communities,” said Josh Reeves, the hospital's executive director of operations. “And having that extra money would really help us."
Losing jobs when a hospital closes can be detrimental to the community.
A 2006 study from researchers the University of North Carolina linked rural hospital closures with a $703 reduction in per-capita income in the surrounding area, or $1,400 in 2018 dollars.
Increasing resources can have the opposite effect.
In Kentucky, researchers in 2014 found the state added 5,400 health care and social service jobs in its first year of expansion. And in Louisiana alone, researchers at Louisiana State University found expansion supporting an estimated 6,000 in health care, in 2018 and 2019.
That could be true in Missouri, too.
Craig McCoy, president of Mercy Springfield Communities, said he hoped to take the additional Medicaid money and put it back into the areas that need it.
"It would give us the ability to continue to build and enhance our services and offer more in our rural communities," he said.
It may not stop at hospitals, either.
Research suggests Medicaid expansion leads to more patients seeking primary care, and community health centers would almost certainly play a substantial role in absorbing that increase in demand, especially in rural areas.
Tim Shryack, the CEO of Missouri Ozarks Community Health, which operates seven clinics across Douglas, Wright, Texas and Ozark counties, sees it coming.
"With the new guidelines, there’s got to be ways to see 200,000 or so more people," he said in an interview last week. "We think we could see an increase, and I would need to add nurses, doctors to treat them."
"That's why we think this could be a jobs thing, too."
Austin Huguelet is the News-Leader's politics reporter. Got something he should know? Have a question? Call him at 417-403-8096 or email him at firstname.lastname@example.org. You can also support local journalism at News-Leader.com/subscribe.