Arkansas Center for Health Improvement

AHA Report Measures Impact of Private Option on Arkansas Hospitals

Article Date: 10/31/2014


For Immediate Release                                                                                      






                                                                                                       Information Contacts:
                                                                                                       Paul Cunningham

                                                                                                        L. Lamor Willliams


Uncompensated Care Losses Fall by $69.2 Million Over Six Months

[Little Rock, Ark.] During the first six months of this year, the number of people hospitalized without insurance fell by 46.5 percent compared with the same period last year, an Arkansas Hospital Association study found.

The report is based on a survey conducted jointly by the Arkansas Chapter of the Healthcare Financial Management Association and the Arkansas Hospital Association (AHA) in August and September. Hospitals responding to the survey represent nearly 80 percent of all hospital patient services by revenue and admissions.

According to the study, out of about 136,000 hospital admissions from January to June in 2014 and 2013, more than 4,900 patients were uninsured this year compared with just over 9,100 in 2013.

The reductions are linked to the Arkansas Private Option, the state’s plan for expanding health insurance to low-income individuals. The plan has been operational since January 1. In a six-month span, hospitals cared for fewer uninsured patients in all settings, including patients admitted for inpatient care, those presenting to hospital emergency rooms and outpatient clinic patients.

AHA President and CEO Bo Ryall said, “This survey completes a picture showing that the Arkansas Private Option is successfully doing what it was intended to do. Recent reports have documented that Arkansas leads all other states with the sharpest reduction in its uninsured rate among adult residents since the beginning of the year. So, the private option is definitely making healthcare more accessible for the 204,000 Arkansans enrolled in the program.

For the period Jan. 1-June 30, overall inpatient hospital admissions remained relatively stable compared with the same period in 2013, rising less than 1 percent. Within that small overall increase, the number of uninsured hospitalized patients with no source of payment for their health care fell by 46.5 percent in 2014.

Also, fears that the private option would make care so easily accessible that overcrowding in hospital emergency rooms would rise to unprecedented levels have not materialized, the study found. Total visits to emergency rooms increased less than 2 percent between the six-month spans in 2013 and 2014, despite approximately 25,600 patients with new policies purchased through the Health Insurance Marketplace. Hospitals also recorded 36,400 fewer emergency room visits by uninsured patients, a 35.5 percent decline.

An increase in the number of patients having insurance policies purchased through the Health Insurance Marketplace apparently did drive an overall 5.8 percent jump in total non-urgent hospital outpatient clinic visits. AHA reports that is an indication that more patients began avoiding emergency rooms as a point of entry into the health care system and instead are seeking care in more appropriate settings such as physician offices and hospital outpatient clinics. At the same time, the total number of uninsured patients seen in those clinics also fell 36 percent.

The reduction in the numbers of uninsured patients translates into the private option’s key benefit: hospitals’ uncompensated care losses related to uninsured patients fell by 56.4 percent, yielding a total six-month benefit of $69.2 million.

“The survey now indicates that the private option is reducing uncompensated care significantly. We can safely say that the private option has saved many rural Arkansas hospitals from buckling under their growing uncompensated care burdens,” Ryall said.

The Arkansas Hospital Association assists member hospitals in Arkansas through advocacy, education, quality improvement and policy analysis. The Healthcare Financial Management Association is a national nonprofit membership organization for health care financial management executives and professionals.

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Arkansas Center for Health Improvement
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