Healthcare Staffing Report: Feb. 5, 2015

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ACA helps drive increase in hospital admissions, staffing firms benefit

On Dec. 31, we released our annual assessment report of the US healthcare staffing market. One of the recent trends addressed in this report is the improvement in hospital admissions (in terms of both overall volume and mix). As shown in our graph, year-over-year trends in same-facility admissions have improved over the last few quarters as reported by three large, publicly traded hospitals (Community, HCA and Tenet), partly due to the newly insured as a result of implementation of the Patient Protection & Affordable Care Act (ACA). The increase in patient volumes (particularly the suddenly greater-than-expected increase in volumes) has recently helped drive strong demand in many areas of healthcare staffing.

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Not only is ACA driving higher overall volumes at hospitals, but it is also lowering uninsured admissions, partly due to Medicaid expansion. A decline in uninsured admissions improves a hospital’s financial health, allowing it more freedom to increase staff levels. Our tables of results from public hospital companies all show an increase in Medicaid admissions and a decrease in uninsured admissions, on a same-facility basis. Though each company reported the information a bit differently, the general theme is the same.

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While trends are more stark in states that have expanded Medicaid, the trends are in the same direction (though with less magnitude) in the other states as well, due to the “woodwork effect” named as such due to the patients expected to “come out of the woodwork” due to those who qualify for Medicaid regardless of the expansion signing up because of the individual mandate or greater outreach.

As hospitals report Q4 results this month, we anticipate these trends to continue.