Missouri’s Safety Net Health Care Providers See Increase in Uninsured, Face New Financial Strains As a Result of 2005 Medicaid Changes


KANSAS CITY, MO – Missouri’s safety net health care providers are seeing increased numbers of uninsured patients and are incurring new financial strains as a result of the changes made to Missouri’s Medicaid system in 2005. New reports released today also demonstrate how these safety net providers – Missouri’s hospitals and Federally Qualified Health Centers (FQHCs) – pass on to those with private insurance their increasing cost of providing care to the uninsured.

“These reports highlight the fact that while the 2005 changes to Missouri’s Medicaid system may have reduced that line item in the state budget, the need to provide the services did not go down,” said Ryan Barker, MFH Policy Analyst. “As a result, the costs of providing care to those that lost coverage was picked up through more local tax dollars, reduced services in other areas, and/or increasing the cost of care provided to privately insured patients.”

The reports (see link below) — released today by the Missouri Foundation for Health in conjunction with the Health Care Foundation of Greater Kansas City and in cooperation with the Missouri Hospital Association and the Missouri Primary Care Association – examined the impact of the 2005 changes to Missouri’s Medicaid/SCHIP program on the state’s safety net health care providers.

Among the key data highlighted in the reports:

Both hospitals and FQHCs saw an increase in the number of uninsured patients, corresponding to a decrease in the number of patients with Medicaid/SCHIP coverage.
FQHCs saw a drop in Medicaid revenue after the 2005 changes were enacted. This loss in Medicaid funding was made up for with funding from government grants and contracts, as well as other sources, resulting in communities effectively picking up more of the tab for the cost of care for the uninsured.
Hospitals saw an increase in charity care cases and the amount of bad debt. (“Bad debt” refers to charges that hospitals have not collected from patients who otherwise are able to pay.) Hospitals offset their increased costs by increasing the amount they charged private insurance. Consequently, these increased costs are passed on to those with private insurance through increases in their premiums. Increased premiums drive employers and individuals to drop their health insurance, which further increases the number of uninsured.
The report on Missouri’s hospitals examined the impact on hospitals based on ownership category (public, for-profit, and not-for-profit), their geography — dividing Missouri into four regions: Kansas City Metropolitan Statistical Area (MSA), St. Louis MSA, other urban MSAs, and rural – and other factors.

“The 2005 Medicaid cuts precipitated a significant shift in the state’s health safety net — from the state and federal government to individuals with commercial insurance and self-pay patients,” said Dwight Fine, senior vice president of health policy for the Missouri Hospital Association. “Moreover, the study verifies that Medicaid coverage reductions correlate with an immediate increase in emergency department utilization for care and a decline in health status caused by the elimination of a primary care venue.”

The report on Missouri FQHCs reviewed data for 17 centers during 2004 and 2005 and a total of 19 FQHCs for 2006. It examined data such as the income level, age, and insurance source of FQHC patients as well as the sources of revenue for Missouri’s FQHCs.

“Health coverage and adequate reimbursement, especially through Medicaid, are absolutely critical for the viability of safety net providers such as Community Health Centers. There is no doubt that Community Health Centers have struggled to maintain capacity to take care of growing numbers of low-income under and uninsured individuals in every region of the state. This report illustrates why it is more important now than ever to have a rational discussion about building a system that ensures affordable health access for all Missourians,” said Joseph Pierle, Chief Executive Officer of the Missouri Primary Care Association.

“These reports demonstrate how for Missouri’s safety net providers, health care costs act like a balloon. Pushing down in one place only makes costs increase in other parts of the system,” said Barker. “Our hope is that these reports will help Missouri policymakers better understand this process so that they can take action to prevent this balloon from ‘popping’ in the form of safety net providers no longer having the ability to provide services or in the form of costs to taxpayers and those with insurance getting so high they cause a major breakdown in the health care system.”

Impact on FQHC Report
Impact on Hospitals Report
Impact on Hospitals Appendices

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About MFH
Established in 2000, MFH is the largest non-governmental funder of community health activities in Missouri. MFH is in its sixth year of grant making, having issued more than $300 million in grants and awards to date. It is dedicated to serving the uninsured, underinsured and underserved in 84 Missouri counties and the City of St. Louis.

ABOUT HCF
The Health Care Foundation of Greater Kansas City strives to improve access and quality of health for the uninsured and underserved in Kansas City, Missouri, Cass, Jackson and Lafayette counties in Missouri and Allen, Johnson and Wyandotte counties in Kansas. Since it began grantmaking in 2005, HCF has awarded $70 million to agencies addressing health needs in the community.



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