Alabama hospital operators and the state hospital association called for more federal funding to mitigate ongoing operational losses during a news conference Thursday.
Donald Williamson, president of the Alabama Hospitals Association, said in a telephone news conference with reporters, Alabama needed a “significant infusion” of dollars under the American Rescue Plan Act to prevent it. prevent service cuts and closures.
Average operating margin across Alabama hospitals fell 79% from 2019 to 2022, according to an analysis from consulting firm Kaufman Hall that takes into account state and federal COVID-19 relief funds state. Half of the hospitals in Alabama finished last year with negative operating margins.
“What we desperately needed was a substantial amount of ARPA funding, enough to act as a bridge so we could address some of the other fundamental challenges in the reimbursement system and facility retention,” said Williamson. our hospital infrastructure. “This data shows that hospitals in Alabama are facing an existential crisis.”
The hospital association did not specify how much additional ARPA funding would suffice. About $8.5 billion of the 2021 law’s $1.9 trillion is earmarked for rural providers, home to about half of Alabama’s hospitals. Alabama received more than $2.1 billion from ARPA, according to Treasury Department data.
“We will all continue to explore any and all opportunities to support systems,” said Joseph Marchant, CEO of Bibb Medical Center in Centreville, Alabama, and president of Alabama. own funds, but there is no other immediate cash access like the ARPA fund.” Hospital Association.
Alabama hospitals’ average operating margin compared to 2019 declines gradually from 2020 to 2022 as labor and supply cost inflation outpaces revenue growth. Labor costs rose 30% last year compared to 2019, while hospital discharges fell 3% and length of stay increased 6%.
Erik Swanson, senior vice president of data analytics practices at Kaufman Hall, said Alabama has the lowest Medicare reimbursement rate in the country, which affects commercial insurers that also pay less. than.
Most state hospitals are in the final quartile of Medicare payroll-only reimbursements, using labor data from Medicare expense reports to establish payments. “Even though the bottom earners in the Medicare wage index pay bracket received a raise in 2020, Alabama hospitals are still at the bottom of the barrel,” Williamson said.
Nationally, hospitals in states that expanded eligibility for Medicaid under the Affordable Care Act have had better financial outcomes than those in states that don’t, including including Alabama. Alabama Republicans oppose expanding Medicaid eligibility. Research has shown that hospitals in non-expanding states tend to take on more bad debt and provide more charity care.
Just over 15% of Alabamans aged 19-64 are uninsured in 2021, compared with 12.2% nationally, according to census data compiled by the Kaiser Family Foundation. Alabama has the eighth-highest percentage of this population uninsured among the states.
“In addition to the ARPA fund, we have to look at long-term solutions,” Williamson said. “We have to try to address how do we close the coverage gap.”
