The Effect of ACA Medicaid Expansion on Hospital Revenue

27 Pages Posted: 11 Jul 2019

See all articles by Ali Moghtaderi

Ali Moghtaderi

The George Washington University

Jesse Pines

George Washington University

Mark Zocchi

George Washington University

Bernard S. Black

Northwestern University - Pritzker School of Law; Northwestern University - Kellogg School of Management; European Corporate Governance Institute (ECGI)

Date Written: July 10, 2019

Abstract

Prior research has found that in states which expanded Medicaid under the Affordable Care Act, Medicaid revenue rose sharply and uncompensated care costs fell sharply, relative to non-expansion states. The implication is that Medicaid expansion was a boon to hospitals. We conduct a difference-in-differences analysis covering the first four expansion years (2014-2017), confirm these prior results, but show that hospitals in expansion states did not gain in either total revenue or patient revenue, relative to hospitals in non-expansion states. Instead the relative rise in Medicaid revenue was offset by a relative decline other non-government revenue (principally from commercial insurance). Even expansion-state hospitals which in 2013 were in the top decile for Medicaid discharges/total discharges, or proportion of uninsured patients, did not gain revenue, relative to similar hospitals in non-expansion states. We also provide evidence that prior results showing a large relative drop in unpaid care cost are driven by apparently bad data.

Note: The Online Appendix for this paper is available at http://ssrn.com/abstract=3416187.

Keywords: ACA Medicaid Expansion, Hospital Revenue, Hospital Unpaid Care Cost

Suggested Citation

Moghtaderi, Ali and Pines, Jesse and Zocchi, Mark and Black, Bernard S., The Effect of ACA Medicaid Expansion on Hospital Revenue (July 10, 2019). Available at SSRN: https://ssrn.com/abstract=3417768 or http://dx.doi.org/10.2139/ssrn.3417768

Ali Moghtaderi

The George Washington University ( email )

950 New Hampshire Ave NW
Suite 609
Washington, DC 20052
United States

Jesse Pines

George Washington University ( email )

2121 I Street NW
Washington, DC 20052
United States

Mark Zocchi

George Washington University ( email )

2121 I Street NW
Washington, DC 20052
United States

Bernard S. Black (Contact Author)

Northwestern University - Pritzker School of Law ( email )

375 E. Chicago Ave
Chicago, IL 60611
United States
312-503-2784 (Phone)

Northwestern University - Kellogg School of Management

2001 Sheridan Road
Evanston, IL 60208
United States
847-491-5049 (Phone)

European Corporate Governance Institute (ECGI)

Brussels
Belgium

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