Hospital CEOs predict more states will expand Medicaid

Executives with some of the nation’s largest hospital companies predict that Medicaid expansion is on the horizon for more states, including Tennessee.

Three for-profit hospital giants based in Middle Tennessee — HCA, Community Health Systems and LifePoint Hospitals — all reported earnings recently, and all were positive about the impact of health care reform on first-quarter earnings, although HCA was the most cautiously optimistic of the three.

Executives at LifePoint and CHS, which both reported a notable positive effect from Medicaid expansion, predict more states will follow suit. Though these companies are based in Tennessee, they have facilities across the country, and they say an increase in insured customers at hospitals anywhere could help their bottom lines.

“Seven of our 20 states had expanded Medicaid,” LifePoint CFO Leif Murphy said in the company’s recent earnings call. “(In the remaining states), we are working hard ... to help foster a better understanding of participation, and we believe that other states will ultimately expand coverage.”

CHS was also bullish on Medicaid expansion. “Three states of ours are trying to expand Medicaid,” said CFO Larry Cash on the recent conference call. “Hopefully, we’ll get that done.”

CHS CEO Wayne Smith connected the potential for Medicaid expansion with political elections.

“Most Republicans, in my understanding, are concerned about the tea party knocking them off in this early (in the 2014 mid-term elections).”

But after that period is over, he added, states including Pennsylvania, Missouri and Utah could potentially expand the program.

“And then, I think, as this continues to develop and people begin to get an understanding of what it’s doing for the uninsured population, not only in terms of coverage but in terms of improving their health, — [it’s] hard to improve your health if you don’t have access to health care. I think, you’ll see those states come around.”

Tennessee, he said, was as good a state as any to consider some type of coverage expansion plan in the future.

Yet, so far, Tennessee has not made much progress in terms of expanding Medicaid or a Medicaid-like program. “Getting something passed – even if it’s something we get approved by HHS that we believe is good for Tennessee – will not be an easy sell at all,” according to Laura Herzog, a spokeswoman for Governor Haslam’s office. “That’s why we’re working so hard to get something in Washington that can sell here,” she said. “We know providing additional health care coverage for folks is a positive. The question is, what’s the financial impact on the state? The governor has to be convinced we can come up with something that both controls provider costs and makes certain there are incentives for truly good outcomes.”

Reach Shelley DuBois at 615-259-8241 and on Twitter @shelleydubois.