Does Medicaid Expansion Boost Hospital Quality?

by Wyoming Liberty Group Staff

As an informed consumer, I have come to expect that if I spend more money on a product, I will receive a greater value and quality product than if I spent less money on it. Although this rule applies to cosmetics, clothing, and motor vehicles, the jury is out on whether or not throwing more money at healthcare creates positive results for hospitals and patients. The proof is in the nation-wide hospital quality survey conducted by independent research groups like Leapfrog.

Recently, Leapfrog released their survey outcomes for hospitals from Portland, Oregon, to Portland, Maine, and the results are scattered, to say the least. The theory goes that if there is a problem with hospital quality, then throwing money at it could be a viable solution. This was put to the test, in part, with the influx of Federal funds in the form of Medicaid expansion. The promise from the federal government was that they would pay for 100% of Medicaid expansion from the outset, and then states would gradually increase their portion of the bill until they were paying 10% of expansions' costs.

So, does the theory that more money would increase hospital quality hold clout? The Leapfrog results seem to indicate that there is not a statistically significant correlation between more Medicaid expansion dollars and an increase in hospital quality. If the theory were proven true, then we could expect that Medicaid expansion states would boast higher average quality hospitals than states who had forgone expansion.

The results? It is a mixed bag in every sense of the word. Now, this information should come with the caveat that this represents the hospitals that responded to Leapfrog's survey, and Leapfrog leaves the information that hospital administrators do not fill in blank, which affects the hospital's overall score. You should also keep in mind that, in the case of Wyoming, Leapfrog does not include critical access hospitals. That means that this is only a snapshot of hospitals across the nation, but it still serves to demonstrate that more Medicaid funding does not necessarily equate to higher quality hospitals.

The results of Leapfrog's survey across the states that border Wyoming are below:

All data collected from the Leapfrog Hospital Safety Grade.

As you can see, states that have already expanded Medicaid (Colorado and Montana) do not have a significantly higher rate of quality hospitals when compared to states that have not yet expanded Medicaid (Idaho, Utah, Nebraska, South Dakota, and Wyoming). Notice that states like Utah and Colorado have nearly as many "C" rated hospitals as they do "A" rated ones and that Idaho has one more "C" rating than it does "A".

This demonstrates how the theory of throwing money at hospitals to improve their quality holds no merit because we would expect to see more "A" rated hospitals in Colorado and Montana if this theory were true. Instead, we found a smattering of low ratings for expansion states, with non-expansion states holding ground in terms of overall hospital quality. On a final note, Utah, Nebraska, and Idaho recently passed Medicaid expansion, so we will have to follow up in the coming years to determine whether or not expansion has improved their quality of healthcare.

We should not use the excuse of improving hospital quality as a reason to pass Medicaid expansion. People who would have you believe otherwise are willfully ignoring the data, and they should take into consideration whether or not an additional $17 million for Medicaid (see below) is justified if the end result is inconclusive. It does not matter if our bodies are physically healthy if our state treasuries are not fiscally healthy in the long run.

This is the first in a series of hospital quality analyses. You can expect to see this inquiry assess whether or not Medicaid boosts hospital quality on a nationwide level.