March 24, 2017 at 4:19 p.m.
JCH payer mix is out of balance
Editorial
So, with four sources of hospital revenue — health insurance companies, Medicare, Medicaid and private pay — why has Jay County Hospital been posting red ink?
The short answer is that the mix has changed.
Starting back in 2016 or even 2015, Jay County Hospital started seeing a larger percentage of patients on Medicare and Medicaid relative to those on private health insurance.
In some ways, that’s great. Expansion of Medicaid under the Affordable Care Act meant more people who needed treatment were able to get it.
Trouble is, what Medicare and Medicaid pay to hospitals doesn’t cover the cost of the services rendered. They pay a large chunk, but they don’t cover the full cost. Instead, that’s picked up by private health insurance companies and private pay patients.
Cost shifting covers the difference. Someone on a company-paid health insurance plan will be billed — and the hospital will be paid — at a higher level than patients on Medicare and Medicaid.
It all works out pretty much OK until the mix gets out of balance, and that’s what has happened to Jay County Hospital.
Some of that might be attributed to the Affordable Care Act. On the one hand, it expanded Medicaid coverage to more people, so those folks went to hospitals for treatment they needed. At the same time, higher deductibles may have led people with private insurance to delay treatment.
But that’s just a guess.
Whatever the reason, the mix — the ratios between private health insurance and programs like Medicare and Medicaid — started to shift.
At first, it was kind of gradual. But sometime last summer, hospital finances stepped off a cliff.
And finding a solution has been a challenge.
It’s hard to focus on bringing in new private pay health insurance patients at the same time the bottom line is bleeding. It’s hard to bolster the quality of care at the same time you’re counting nickels and dimes.
Now, after months of red ink and complete uncertainty on the national level when it comes to health care policy and programs, the hospital’s board of trustees finds itself at a crossroads it simply could not have imagined a few years ago.
Saturday: Now what?
The short answer is that the mix has changed.
Starting back in 2016 or even 2015, Jay County Hospital started seeing a larger percentage of patients on Medicare and Medicaid relative to those on private health insurance.
In some ways, that’s great. Expansion of Medicaid under the Affordable Care Act meant more people who needed treatment were able to get it.
Trouble is, what Medicare and Medicaid pay to hospitals doesn’t cover the cost of the services rendered. They pay a large chunk, but they don’t cover the full cost. Instead, that’s picked up by private health insurance companies and private pay patients.
Cost shifting covers the difference. Someone on a company-paid health insurance plan will be billed — and the hospital will be paid — at a higher level than patients on Medicare and Medicaid.
It all works out pretty much OK until the mix gets out of balance, and that’s what has happened to Jay County Hospital.
Some of that might be attributed to the Affordable Care Act. On the one hand, it expanded Medicaid coverage to more people, so those folks went to hospitals for treatment they needed. At the same time, higher deductibles may have led people with private insurance to delay treatment.
But that’s just a guess.
Whatever the reason, the mix — the ratios between private health insurance and programs like Medicare and Medicaid — started to shift.
At first, it was kind of gradual. But sometime last summer, hospital finances stepped off a cliff.
And finding a solution has been a challenge.
It’s hard to focus on bringing in new private pay health insurance patients at the same time the bottom line is bleeding. It’s hard to bolster the quality of care at the same time you’re counting nickels and dimes.
Now, after months of red ink and complete uncertainty on the national level when it comes to health care policy and programs, the hospital’s board of trustees finds itself at a crossroads it simply could not have imagined a few years ago.
Saturday: Now what?
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