Dan Rahn: Expanding Medicaid Critical for UAMS

by Mark Friedman  on Monday, Jan. 28, 2013 12:00 am  

The state Legislature’s approval of the expansion of Medicaid to the 250,000 Arkansans who aren’t on it is critical, says Dr. Dan Rahn.

Although the expansion will help, it won’t solve all of the financial problems of the University of Arkansas for Medical Sciences.

Rahn, UAMS chancellor, on Tuesday told the Arkansas House Committee on Public Health, Welfare & Labor that the projected cost of treating uninsured patients at UAMS’ hospital would rise to $66 million in 2014 if Medicaid isn’t expanded. With expansion to cover Arkansans earning up to 138 percent of the poverty level, that cost could be reduced to $38 million — below the $42.5 million cost reported for 2010 in a study by the Arkansas Hospital Association.

“We cannot sustain that trend” of rising treatment costs if Medicaid isn’t expanded, Rahn told the committee.

In a recent interview with Arkansas Business, Rahn said UAMS was pushing for Medicaid expansion while trying to cope with a flurry of other potential financial emergencies:

• A possible $10 million in federal cuts stemming from budget reductions for Medicare and the National Institute of Health

• A rising number of uninsured patients this year

• A decrease in net state revenue

“The trends that we’re seeing are the increased costs associated with uninsured care,” Rahn said. “We’re going to have to seek new revenue streams, reduce expenses or both.”

For the fiscal year that ended June 30, the UAMS campus reported an operating loss of $63.3 million and a net loss of $7.9 million, even after state appropriations, gifts and investment income. That compared with an operating loss of $29.4 million and net income of $42.23 million the previous year.

Most of the loss in fiscal 2012, though, was tied to an accounting charge involving the booking of sick leave benefits to UAMS employees.

“There were a number of things that worked against us,” Rahn said of fiscal 2012.

UAMS’ hospital alone reported a loss of $568,712 on total patient revenue of $1.4 billion.



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