Obamacare mandate could decrease hospital productivity

A study in Massachusetts shows that hospitals have experienced a drop in productivity since the state’s individual mandate began in 2007.  All US hospitals showed some decline, but MA had the greatest drop by nearly twice as much.  This “universal coverage” was supposed to help hospitals save money and decrease patient cost.

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Study: ACA mandate could decrease hospital productivity

Study examines impact of Mass. insurance mandate on hospitals

August 02, 2012

A new study in Health Care Management Review finds that Massachusetts hospitals experienced a significant decrease in productivity after the state’s individual insurance mandate was implemented in 2007, a finding that could have broad implications as hospitals prepare for the federal mandate.

For the study, researchers from Texas Tech University and the University of North Carolina-Greensboro used economic models to assess productivity levels at 51 Massachusetts hospitals, 197 comparable hospitals, and 2,916 other U.S. hospitals from 2005 to 2008.

They found that:

 •From 2005 to 2006, prior to the implementation of Massachusetts’ state insurance mandate, productivity decreased slightly at all U.S. hospitals, but that decrease was especially pronounced at Massachusetts hospitals, where productivity dropped by 2.4%.

•From 2006 to 2007, as the mandate was implemented, productivity again decreased slightly at all U.S. hospitals. However, the productivity decrease was two times higher at Massachusetts hospitals than at comparable hospitals.

•From 2007 to 2008, productivity at Massachusetts hospitals increased by 2.5%, slightly more than at comparable hospitals. However, the productivity increase in Massachusetts was less than the increase at hospitals nationwide.

Altogether, the researchers determined that Massachusetts hospitals from 2005 to 2008 lost 3.5% of their productivity, compared to a 1.6% loss at comparable hospitals and a 4.1% gain at all U.S. hospitals.

“Based on the Massachusetts experience, legislating mandatory health insurance coverage at the national level is likely to be accompanied by a near-term decrease in overall hospital productivity and a concomitant increase in overall health care costs,” the researchers write.

Nonetheless, the researchers predict that “universal coverage should lead to significant savings for hospitals if they can shift non-emergent care away from their emergency departments” (Oh, Becker’s Hospital Review, 7/30; Lippincott Williams & Wilkins release, 7/30).

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