A typical Stat Air Cooperative flight from Glasgow to Billings costs nearly $8,000, Medicaid pays $3,500. The fixed-wing service owned by six northeastern Montana hospitals has seen a 21 percent increase in Medicaid patient flights since Montana expanded the program for low-income folks in January 2016. Meanwhile, Stat Air saw an 18 percent drop in Indian Health Service flights and business from other sources that pay better than Medicaid.
The loss is shared by all the air ambulance owners: Frances Mahon Deaconess Hospital in Glasgow, Phillips County Hospital in Malta, Northeast Montana Health Services in Wolf Point and Poplar, Roosevelt Medical Center in Culbertson, Fallon Medical Complex in Baker and McCone County Health Center in Circle.
Despite low air ambulance reimbursement, Glasgow hospital administrator Randy Holom says his board of directors remains solidly in favor of the expanded Medicaid program.
“The main reason we supported it in the first place and we continue to support it is because we know when people don’t have coverage, they avoid seeking service at the right time in the right setting,” Holom said in a telephone interview with The Gazette last week. “We are well run; we do OK. This is a great hospital and we want our people served.”
Like all but the largest Montana hospitals, Frances Mahon Deaconess is licensed as a Critical Access Hospital, which means it’s the only hospital in its community and qualifies for cost-based reimbursement from Medicaid and Medicare. However, reimbursement from those two government programs doesn’t cover all costs.
Holom was among the Montana hospital leaders who reported to an interim legislative committee this month on the effects of Medicaid expansion. Lawmakers were told that, overall, Montana hospitals saw financial improvement with the expansion of Medicaid to 94,000 very low-income adults, but the picture is complicated.
Bob Olsen, vice president of the Montana Hospital Association, presented the committee with a report based on data provided by about half of the state’s community hospitals, including these points:
Uncompensated care (charity and bad debt) fell by a whopping 46 percent between 2016 and 2017, dropping by $119.7 million.
Total patient charges attributed to Medicaid jumped to 17.78 percent, while the self-pay category dropped to 2.31 percent. (Self-pay patients typically are uninsured.)
Operating costs increased by 7.48 percent with payroll up slightly more at 7.8 percent.
Collectively, between 2016 and 2017, the hospitals counted a 1.7 percent increase in inpatient admissions, a 2.8 percent boost in inpatient days, a 2 percent drop in outpatient visits, a 2.3 percent increase in emergency room visits and an increase of 12.7 percent in ambulatory surgeries.
Critical Access Hospitals saw a 10.9 percent loss on patient care in 2017. Adding non-patient revenues, donations and all other revenues, these small hospitals fell just short of break-even in 2017 with a collective loss of 0.2 percent. In 2016, these same small, rural hospitals posted a loss of 16.28 percent on patient services.
The eight larger hospitals reporting to MHA did better, improving from a 0.51 percent patient margin in 2016 to 3.09 percent in 2017.
“Some policymakers predicted that expanding Medicaid coverage would produce a financial windfall for all hospitals as formerly uninsured patients would have a pay source,” Olsen reported. “Instead, the data show a combination of positive and negative changes in the revenue picture. Uninsured patients gaining Medicaid coverage has no doubt produced additional revenue for hospitals. This change is offset by some patients covered by commercial insurance prior to expansion becoming Medicaid eligible.”
The Affordable Care Act allowed people with income between 100 percent of poverty level and 138 percent (about $16,000 annual) to enroll in private marketplace plans with federal premium subsidies based on their income. Once a state expands Medicaid, the law says people at those income levels cannot get private premium subsidies; their only coverage option is Medicaid, which costs the government less.
As the debate on reauthorizing Medicaid expansion heats up, let’s bear in mind that the data so far shows huge gains for Montanans and our statewide economy. But the program hasn't made every Montana health care provider a winner. It’s worth delving into the details to understand how Medicaid is working. Beware of rhetoric that fixates selectively on one or a few examples. When health care for nearly 1 in 10 Montanans is at stake, the focus must be on the big picture.