Oregon Hospitals See Increased Charges During First Quarter

Southern Coos Hospital saw the highest increase followed by Samaritan Pacific Communities, while other hospitals, including Providence Hood River saw their charges decline during the same time period.

Oregon’s hospitals are performing more inpatient surgeries, hosting more outpatient visits, and billing many of millions of dollars more for services than just a year ago - an apparent result of the state’s Medicaid expansion, according to a Lund Report analysis of financial and utilization figures provided by the Oregon Health Authority’s Research and Data Unit.

The state’s 60 hospitals collectively billed $5.3 billion for care provided from January through March, an 8.9 percent – or $399.8 million – climb from the first quarter of 2013. And an industry metric known as the “payer mix” suggests that far fewer uninsured patients showed up in Q1 2014 than a year earlier, while soaring enrollment in coordinated care organizations prompted newly covered patients to seek care they might previously have neglected.

Hospitals track payer mix to understand who is paying their bills. Commercial insurance plans pay the most for most procedures, followed by Medicare (for seniors) and Medicaid (for people with low incomes), with “self-pay” patients – the uninsured – the least likely to be able to pay their bills.

Since the start of the year, the mix has been shaken up, according to first-quarter reports:

  • Traditional commercial health insurance became a smidge less central to the state’s hospitals, dropping from 34.4 percent of all charges last year to 33.4 percent this year. Commercial insurers were billed $85 million more by hospitals this Q1 than in the first three months of last year, but Medicaid grew at a much faster clip.
  • Medicaid enrollment, administered by the Oregon Health Plan to cover the poor, primarily through CCOs, grew by 50 percent in the year that ended March 31. Medicaid billings by hospitals grew a corresponding 42 percent, or $318 million. Medicaid was charged for 20.4 percent of all Oregon hospital care in the first quarter, up from 15.5 percent a year earlier.
  • As formerly uninsured people enrolled in CCOs or, in some cases, signed up for commercial insurance, self-pay dropped from 6.6 percent of hospital charges to 3.3 percent – resulting in $147.3 million less billed to individuals in the first quarter of this year. That’s especially good news for hospitals, since self-pay patients are the last likely to be able to afford their medical bills.
  • Medicare, the government-funded program for older Americans, was billed $2.3 billion by Oregon hospitals from January through March – making it the largest payer of hospital bills in the state. Medicare was billed for about 43 percent of all first-quarter hospital charges statewide, about $144 million more than a year ago.

Viewed in aggregate, the shift that’s taken place over the past year is good for most of Oregon’s hospitals. But not every hospital in the state is seeing the same benefits from the Affordable Care Act’s expansion of Medicaid access. And more demand for services is bringing short-term costs and stressors to healthcare organizations that must spend now to add physicians, nurses and lab capacity, and wait to be paid for those costs later.

“It’s also important to note that in many cases Medicaid does not cover the true cost of providing services,” said Randy Querin, spokesman for PeaceHealth, a Vancouver, Washington, healthcare nonprofit that operates four hospitals in Oregon.

“While getting a Medicaid payment is better than getting no payment at all, an increase in Medicaid patients does not mean an increase in ‘profits,’” Querin said.

Publicly available reports for most of Oregon’s hospitals don’t yet show how profits or losses are being affected by shifts in the payer mix, but the figures do show who’s getting busier and who is billing less.

Hospitals showing the largest percent increases in health service billings in the first quarter of 2014 were generally rural. Southern Coos Hospital billed $5.6 million in the first quarter, a 46.6 percent increase. It charged more for Medicare and for Medicaid. On the Medicaid front, Southern Coos is the hospital of choice for the only CCO that serves the region. Newport-based Samaritan Pacific Communities Hospital increased first-quarter charges by 26 percent, to $35.9 million, with Medicaid gaining market share and all other payers losing share.

Eight of Oregon’s 60 hospitals billed less in the first quarter of 2014 than a year earlier: Providence Hood River, Tuality Healthcare, Pioneer Memorial in Heppner, Silverton Hospital, St. Charles Madras, Wallowa Memorial, and Shriners Hospital for Children.

Meanwhile, the state’s largest hospital by billings, Oregon Health & Science University, charged $645.5 million in the first quarter of this year, up 7.5 percent, as Medicaid payments climbed by $40.9 million.

Click here to view the accompanying spreadsheet and explore in-depth additional changes in the payer mix at Oregon’s hospitals.

Courtney Sherwood can be reached at [email protected]. Follow her on Twitter at @csherwood.

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