Because the Affordable Care Act (ACA) reduced certain Medicare and Medicaid payments to hospitals, there was concern that the law would have a negative impact on urban hospitals that care for large numbers of low-income, uninsured patients. However, some safety net hospitals have seen a faster-than-expected decrease in the number of uninsured patients, which has resulted in an increase in revenue.

Medicare and Medicaid payments to "disproportionate-share hospitals" help those facilities cover costs for uncompensated care. In 2013, costs for uncompensated care ran to an estimated $85 billion, and at least 65% of those costs were offset by government payments, according to one recent study. The ACA reduces these federal payments based on the assumption that hospitals would see fewer uninsured patients.

This is proving to be the case-at least in the 25 states that have expanded Medicaid. Take Harborview Medical Center in Seattle. Washington has expanded Medicaid, and according to a report in Kaiser Health News (http://bit.ly/UnAupm), the number of uninsured patients at Harborview fell from 12% last year to 2% this spring. As a result, the hospital's revenues are expected to increase by $20 million this year.

Other urban hospitals, both safety-net and investor-owned facilities, have reported similar decreases in the proportion of uninsured patients since January, when expanded Medicaid coverage took effect. In contrast, hospitals in states that chose not to expand Medicaid are facing funding cuts without a corresponding drop in uncompensated care.

Likewise, although an online poll by the American College of Emergency Physicians showed an increase in ED visits since implementation of the ACA, some hospitals are beginning to report decreases, with more patients seeking care at primary care clinics instead of the ED. In Denver, for instance, visits to primary care offices have increased by 14% this year while ED visits have dropped by 2%.-Karen Rosenberg

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