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AHCA threatens Ohio’s growing health care sector

May 23, 2017

AHCA threatens Ohio’s growing health care sector

May 23, 2017

Four out of Ohio's top 10 employers are in health care

Introduction

As the battle over health care in America intensifies, more attention is being paid to how repeal of the Affordable Care Act (ACA) could harm local economies. Health care now provides one out of every eight private sector jobs in America[1] and is projected to account for nine of the nation’s 12 top-growing jobs over the next decade.[2]

In Ohio, more and more people report to work each day at hospitals, health centers and nursing homes, rather than the steel mills, auto plants and mining operations that have historically shored up the state’s local economies. So much so that Northeast Ohio – where manufacturing employment fell by 40 percent, while health care employment increased by 30 percent since 2000 – was featured in recent New York Times coverage on the harm ACA repeal could cause the nation’s growing health care sector.[3]

Of the industry groups in Ohio projected to add the most new jobs between 2012 and 2022, 30 percent are in the health care sector.[4] These include home health care services, outpatient care centers, continuing care centers for the elderly, health practitioner offices and doctors’ offices. Currently, four of Ohio’s top 10 employers are hospitals and health care providers (the Cleveland Clinic is No. 2, MercyHealth No. 5, University Hospitals is No. 7 and Ohio Health is No. 8).[5]

With the state’s population of seniors 85 and older projected to increase by 18 percent between 2025 and 2035,[6] we can expect Ohio’s health care sector to keep growing.

As legislators continue to push large cuts in funding to Medicaid and Medicaid expansion, and re-structuring American health insurance in ways that will slash coverage for millions of Americans, it is essential to understand what these changes could mean to Ohio’s health care sector and those who are employed and cared for by it.

This report breaks down which Ohio counties have an outsized amount of health care jobs, in order to see where changes to health coverage could have a particular impact on local economies. Jobs measured in these figures include those provided by private hospitals, outpatient care providers, and nursing and residential facilities.[7]

Ohio health care jobs

Between 2000 and 2015, the percentage of Ohio jobs provided by the private health care sector increased from 11.1 percent to 14.9 percent.[8] More than one out of seven of our neighbors — a total of 676,948 Ohioans as of 2015 — works in the private health care sector.

AHCA threatens Ohio’s growing health care sector

AHCA threatens Ohio’s growing health care sector

Across all Ohio counties in 2015, the share of private sector jobs that were in health care ranged from just under 4 percent to nearly 24 percent. The counties with the largest shares of jobs in health care were Jefferson, Scioto, Lawrence, Montgomery, Allen, Mahoning, Lucas, Cuyahoga, Perry and Ashtabula. These are places where more than one out of every six private sector employees works in health care. Of these, all but two were among the top fifth of Ohio counties in the share of their population who were Medicaid expansion enrollees in 2016.[9]

Jefferson County’s 23.3 percent health care job share is particularly notable because, overall, the county lost 4,706 private sector jobs between 2008-2015, or 21.1 percent of its private sector jobs. The health care field has made up for a sharp loss in manufacturing jobs in Jefferson (which have fallen from 15.2 percent of the county’s overall employment in 2000 to 5.3 percent in 2015, according to a recent county profile by The Plain Dealer.[10]) All of the top ten counties for health job share in 2015 saw small (ranging between .8 and 3.8 percent) overall private sector job loss between 2008-2015, but far less than what we saw in Jefferson. Without the health care job gains, job loss in these counties would have been even more devastating.

AHCA threatens Ohio’s growing health care sector

In Ohio’s urban counties, the total number of health care jobs grew by 10.3 percent between 2008 and 2015, compared with only 0.2 percent private sector job growth overall. With health care jobs growing much more quickly than overall job growth, health care’s share of all private sector employment grew by 1.3 percentage points across Ohio’s seven largest urban counties. All but Lucas County saw increases in health care job share. Among urban counties, health care’s share of private sector jobs grew the most in Cuyahoga County, by 2.3 percentage points.

Ohio counties with large metropolitan centers unsurprisingly have a large health care sector employment share across the board, which averaged 17.1 percent — compared to the state average of 14.9 percent — in 2015.

Cuyahoga County had by far the largest number of health care sector jobs in 2015, at 114,549 total jobs, making up 18.4 percent of the county’s private employment. Franklin came in in second, with 84,335 jobs and 13.9 percent of total employment.

AHCA threatens Ohio’s growing health care sector

Between 2008 and 2015, Morgan, Monroe, Hocking, Mahoning, Lawrence, Jefferson, Scioto, Darke, Adams and Clinton counties had the largest increases in the percentage of overall jobs provided by the private health care sector. Monroe (-30 percent), Jefferson (-21.1 percent), Adams (-9.8 percent) and Clinton (-37.1 percent) counties all saw sharp overall decreases in total private employment between 2008-2015, even including these health care job gains.

Six of these 10 (Morgan, Monroe, Scioto, Darke, Adams and Clinton) are rural counties.[11] Monroe and Morgan were Ohio’s third and fourth least populated counties in 2015. Mahoning County (where Youngstown is located) is the only one of these counties with a population over 225,000.

While central hospitals often anchor health care employment in rural counties, that is not always the case. In Monroe County, for example, a Chamber of Commerce representative attributes the county’s health care job growth to the fact that health care is one of the few fields where jobs and job training are available. Home health care workers, certified nurses and hospice workers are in high demand because of the county’s aging population, and many residents travel an hour or more to get to these jobs.[12]

AHCA threatens Ohio’s growing health care sector

Table 3 shows employment trends over the period since the ACA and Ohio Medicaid expansion were implemented in 2014. Because there are only two years of data available, the trends are barely distinguishable from the larger shift seen over the past decade.[13] Between 2013 and 2015, Morgan, Monroe, Hocking, Scioto, Henry, Washington, Perry, Lawrence, Clark and Putnam counties saw the largest growth in health care jobs as a percentage of overall private employment. The change in health care job share since the ACA was 2.9 percentage points in these counties (six of which are classified as rural). Ohio’s seven largest counties with metropolitan centers did not see significant changes in the share of overall employment provided by the health care sector, and averaged a 0.3 percentage point decrease in health care job share between 2013-2015.

AHCA threatens Ohio’s growing health care sector

The health sector in urban and rural Ohio

According to American Hospital Association figures, Ohio had 288,461 total full- and part-time hospital jobs in 2015, with hospital payroll and benefits payments totaling $20,036 (in millions). After accounting for the ripple economic effect hospitals have through their purchase of goods and services, the AHA calculates that Ohio community hospitals have a $88,031 (in millions) effect on the state’s economic output.[14]

Among the Ohio counties with the largest health care job share in 2015, Jefferson, Scioto, Allen and Cuyahoga have a hospital as their number one employer, and hospitals are the top two employers in Jefferson, Allen and Cuyahoga. In Mahoning county, Mercy Health and ValleyCare are among the county's top three employers.[15]

Without a doubt, hospitals have significant economic reach in Ohio’s metropolitan counties. Greater Cleveland is home to more than 60 hospitals, which together help make the health care sector the region’s largest employer.[16] Cuyahoga County’s top two employers are The Cleveland Clinic and University Hospitals.[17] In Dayton’s Montgomery County, hospitals are the county’s second and third largest employers.[18] Six out of 10 of Toledo’s Lucas County’s top employers are hospitals and health service providers.[19]

The health care sector also drives Ohio’s rural economies, especially in counties that house one or more hospitals or health care networks. Ohio’s small towns and rural counties that have a central hospital tend to fare better economically than those that do not.[20] These counties, where hospitals are often both a major employer (with much of this employment paid for by Medicaid) and a provider of health services to an outsized number of Medicaid recipients, have much to lose under proposed cuts to Medicaid.

While many tend to associate Medicaid beneficiaries with urban centers, in 2015, the percentage of Ohio’s rural and urban residents getting health coverage through Medicaid was identical, at 22 percent. The share of uninsured urban and rural residents was also the same, at 8 percent.[21] All but two of the 22 Ohio counties with the highest percentages of their population enrolled in Medicaid are rural counties. More rural than non-rural Ohioans enrolled in Medicaid through expansion and rural counties have higher overall Medicaid spending per capita than the state average.[22]

Clearly, the health care sector is a central and increasingly important piece of Ohio’s economy. Given that, what could structural changes to American health care mean to Ohio’s economic health? Under cuts proposed through the recently-passed Republican House plan (known as the American Health Care Act or AHCA), Jefferson County could lose $117-155 million in Medicaid funds between fiscal years 2019 and 2025. Ohio as a whole could lose $23 billion.[23]

As lawmakers push to repeal the ACA and dismantle Medicaid expansion, it’s imperative to account for the economic impact these coverage options have had on this growing sector of Ohio’s economy, as well as on the health outcomes of Ohioans.

The ACA and Ohio health

The ACA allowed 900,000 Ohioans to gain health insurance. Through a combination of subsidizing Marketplace coverage, increasing the amount of people eligible for Medicaid through Medicaid expansion and requiring insurers to cover people with pre-existing conditions, the ACA helped many Ohioans enter the health care system for the first time, and others to return to the system after deferring coverage because it had previously been too expensive.

Under the ACA, Ohio’s percentage of uninsured low-income residents fell to 14.1 percent, the lowest rate ever recorded. Proportionally, a huge number of those who gained insurance via the ACA were Ohioans who joined Medicaid through Medicaid expansion[24] (also known as Group VIII enrollees). Medicaid, Ohio’s largest insurer, added 722,873 new enrollees between 2014-2017 through the expansion.[25] Fully 75 percent of Ohio Group VIII enrollees had no prior health insurance, and 32 percent reported not having a regular health care provider prior to enrolling in Medicaid under expansion.[26]

Coverage of so many previously un- or underinsured has had substantial pay off in both health dividends to these individuals and cost dividends to providers. A study on health outcomes for enrollees in Cleveland Metrohealth’s Care Plus program (a precursor to Medicaid expansion) found that in 2013, Care Plus patients with diabetes improved by 8.2 points in diabetes outcomes. This indicates that these patients received preventive care that helps stave off serious, and sometimes fatal, complications.[27]

Similarly, in the Ohio Department of Medicaid’s assessment of Medicaid expansion,[28] Group VIII enrollees reported overwhelmingly positive health outcomes:

- 64 percent reported having easier access to general health care services.

- 59 percent reported better management of chronic conditions, and 43 percent reported less unmet medical needs.

- A majority reported increased use of preventive and primary care services, which allowed 27 percent of Group VIII enrollees to get diagnosed and treated for ongoing medical conditions that had not been previously flagged, often due to lack of access to health care.

- 34 percent reported reduced emergency room visits, and more appropriate usage of the ER.

- 75 percent of Group VIII enrollees with an opioid use disorder reported better overall access to health care. Fifty-nine percent reported better access to mental health services.

- There was a 44.8 percent decrease in reported medical debt for expansion enrollees between the beginning and end of this assessment. Medical debt was often cited as the reason enrollees deferred health care in the past.

Data consistently shows that the 32 states (including Washington D.C.) that expanded Medicaid saw fewer uninsured residents, more use of ongoing health services, better treatment of chronic conditions and increased financial security among expansion enrollees.[29]

Reducing the number of uninsured Ohioans, better integrating more people —especially the most vulnerable — into the health care system, and connecting people to preventive and ongoing care were goals of Medicaid expansion in Ohio.[30] Assessments show they are being successfully met.

Effects of the ACA and Medicaid Expansion on economic outcomes

Increased use of ongoing health services, wellness screenings, preventive care, and primary care physicians has helped Ohio hospital systems and health care providers. Nationally, the Department of Health and Human Services found that visits to community health centers increased by 46 percent in expansion states and 12 percent in non-expansion states, while prescription rates increased 25 percent in expansion states versus 2.8 percent in non-expansion states.[31] In 2016, Medicaid expansion brought $95.5 million a month in federal funding to Northeast Ohio alone.[32]

According to Urban Institute estimates from Center for Medicaid Service quarterly expense forms, a total of $21.6 billion was spent on Medicaid services in Ohio in fiscal year 2015.[33] Of this, $3.9 billion was spent on in- and outpatient care and prescription drugs; $5.8 billion on long-term care; $10.9 billion on Managed Care and health plans; $338 million on Medicare payments and $687 million was paid to disproportionate share hospitals as reimbursements for uncompensated care.[34]

Through a combination of lower out-of-cost payments to beneficiaries, lower payments to providers and lower administrative costs than private insurance, Medicaid has proven to be an economically efficient provider. The Center on Budget and Policy Priorities found that nationally, Medicaid’s administrative costs are half that of private insurers,[35] with payments on adults enrolled in Medicaid coming in 22 percent lower than if they were covered under private insurance.[36]

The cost of uninsurance

Medicaid expansion not only increased health care sector revenues, it also cut down on costly care that many uninsured patients resort to when medical crises arise.

Since 1985, U.S. hospitals have been legally mandated to offer emergency care to individuals who need it, whether they are insured or not. For people who cannot afford insurance, or who have been denied coverage because of pre-existing conditions (as many people were prior to the ACA), emergency rooms can become de facto – and expensive – primary care facilities. In 2015, researchers with the Kellogg School of Management at Northwestern University found that every uninsured person costs U.S. hospitals $900 a year.[37]

The federal government reimburses (often non-profit) hospitals that provide services for a large number of Medicaid or uninsured patients with Disproportionate Share Hospital (DSH) payments. The Northwestern study found that DSH payments do not cover full costs of these services, and hospitals tend to have to make up for two-thirds of uncompensated care costs.[38] The American Hospital Association estimates that if the ACA is repealed without restoring DSH payments to pre-ACA levels, Ohio hospitals stand to lose $15 billion between 2018 and 2026.[39]

Nationally, hospitals saw a 21 percent decrease in uncompensated care costs between the ACA’s 2014 adoption and 2015. Five billion of the $7.4 billion saved nationally by hospitals in uncompensated care happened in Medicaid expansion states like Ohio.[40] The American Hospital Association found that spending on uncompensated care dropped from what had been a steady 5.8 percent average of hospital spending since 1990 to 4.2 percent in 2015.[41] From 2014 to 2016, Medicaid expansion helped decrease hospital admissions for uninsured patients by 6 percent nationally.[42]

As one of America’s largest hospitals, the Cleveland Clinic’s 40 percent reduction in charity care expenses between 2013 and 2014 drew national attention.[43] In its 2016 Annual Report, the Clinic attributed overall reduction in uncompensated costs to the ACA and Medicaid expansion.[44]

What is at stake for Ohio’s health care sector?

Repealing the ACA and cutting Medicaid expansion would reverse tremendous gains made in Ohio. The state has seen a sharp reduction in uninsured residents, a decrease in uncompensated care costs and significant increases in use of ongoing health care services by at-risk residents that can cut costs of care for medical crises in the long-term. The numbers show that cuts to Medicaid would particularly impact rural Ohioans, who are both major Medicaid and Medicaid expansion beneficiaries and are often employed in jobs in some part funded by Medicaid.

In March 2017, the Economic Policy Institute released projections on how the AHCA would decrease job growth gained through the ACA and Medicaid expansion. It found that Ohio could expect a 0.72 percent drag on job growth (amounting to 81,385 jobs) between 2017-2022 if the ACHA were to pass. Cleveland’s Congressional District 11 could lose 8,226 jobs by 2022. Congressional District 6, home to Monroe, Jefferson, Lawrence and sections of Mahoning and Scioto counties (five of the top 10 counties in health care job growth since 2008) could lose 5,372 jobs during the same time period.[45]

By bringing in new patients and creating avenues for more Ohioans to access appropriate preventive care, the ACA and Medicaid expansion have helped grow Ohio’s health care sector in overall job share and in revenues. The result is healthier Ohioans and a healthier Ohio economy.

AHCA threatens Ohio’s growing health care sectorAHCA threatens Ohio’s growing health care sector

AHCA threatens Ohio’s growing health care sector

Acknowledgements

Hannah Halbert

Drew Murray

Community Catalyst

UHCAN Ohio


[1] New York Times. “Health Act Repeal Could Threaten U.S. Job Engine.” Nelson Schwartz and Reed Abelson, May 6, 2017. https://www.nytimes.com/2017/05/06/business/health-act-repeal-would-strike-economys-engine.html

[2]Politico. “Obamacare, the Secret Jobs Program.” Dan Diamond, July 13, 2016. http://www.politico.com/agenda/story/2016/07/what-is-the-effect-of-obamacare-economy-000164

[3] New York Times. “Health Act Repeal Could Threaten U.S. Job Engine.” Nelson Schwartz and Reed Abelson, May 6, 2017.

[4] Ohio Department of Job and Family Services projections from Bureau of Labor Statistics figures. “2022 Employment Projections: Ohio Job Outlook.” December, 2014.

[5] Ohio Development Services Agency. “Ohio Major Employees, Section 1.” April, 2017. https://development.ohio.gov/files/research/B2001.pdf

[6] Center on Budget and Policy Priorities analysis of state demographic projections applied to July 2015 Census Bureau population estimates. http://www.cbpp.org/growing-share-of-seniors-will-be-85-or-older

[7] Data for all counties from 2008-2015 is available in Appendix Table 1.

[8] Policy Matters Ohio analysis of U.S. Bureau of Labor Statistics (BLS) Quarterly Census of Employment and Wages (QCEW) and Ohio Department of Job and Family Services data on annual private employment from 2008-2015. Employment Codes included are 620 (Ambulatory Care), 622 (Hospitals) and 623 (Nursing and Residential Care). Note: BLS confidentiality standards sometimes preclude reporting QCEW data where a single firm dominates an area or industry. Only 19 counties reported hospital employment figures. This means that total state employment calculated by adding together the individual county totals is different than the statewide employment figure. The gap between the total health care employment calculated from the counties and the total generated from the statewide data is about 54,000 jobs, or about 8 percent of the statewide sector total. Data for Vinton County was unavailable from the ODJFS QCEW retrieval tool. The Vinton County 2012-2015 numbers were pulled from the Department of Labor. This data reflects only private employment in the health care sector, though public entities play a large role in health care. These job numbers, therefore, are quite conservative. Much data on jobs in public entities like ambulatory centers, hospitals, nursing facilities and in public health administration is not reported due to confidentiality standards, which is why this report focuses on the private sector.

[9] Policy Matters Ohio analysis of 2016 Ohio Department of Medicaid enrollment figures. http://medicaid.ohio.gov/portals/0/resources/reports/annual/group-viii-assessment.pdf

[10] The Plain Dealer. “Jefferson County by the Numbers: Ohio Matters.” Rich Exner, February 22, 2017. http://www.cleveland.com/datacentral/index.ssf/2017/02/jefferson_county_by_the_number.html

[11] Office of Rural Health Policy. “List of Rural Counties and Designated Eligible Census Tracts in Metropolitan Counties.” November 20, 2015.

[12] May 10, 2017 email correspondence with Barbara Carslund, of the Monroe County Chamber of Commerce.

[13] Measured by comparing pre-expansion job numbers from 2013 with job numbers through 2015.

[14] American Hospital Association. “Hospitals are Economic Anchors in their Communities.” January, 2017.

[15] Data compiled through county Chamber of Commerce listings of top employers, inquiries to Chambers of Commerce and local news reports on top employer listings (2017). Data was not found for Lawrence and Ashtabula counties. ValleyCare, in Mahoning, was bought by Steward Health Care in 2017.

[16] City of Cleveland Economic Development. http://rethinkcleveland.org/Data-Reports/Key-Stats-Figures-(1).aspx

[17] “Cleveland/Cuyahoga County Labor Market Analysis Full Report.” March, 2016.

[18] http://www.dayton.com/business/employment/top-employers-the-dayton-area/58X4L6ox8z15TNIiRpgWZI/

[19] Data provided by the Toledo Chamber of Commerce, May, 2017.

[20] Ibid.

[21] Kaiser Family Foundation. “The Role of Medicaid in Rural America.” Julia Foutz, et al. April 25, 2016. http://kff.org/medicaid/issue-brief/the-role-of-medicaid-in-rural-america/

[22] Ibid.

[23] Ibid.

[24] For states, like Ohio, that chose to expand Medicaid coverage, the Affordable Care Act provided federal funds to cover 100% of the costs through 2016. Non-elderly adults with incomes up to 138 percent of the poverty line were eligible.ds A 2012 Supreme Court decision determined that it would be a state-by-state choice whether to participate in Medicaid expansion or not, and 31 states and Washington D.C. have opted in since then.

[25] Health Policy Institute of Ohio. “Medicaid Basics 2017.” Pulled from Ohio Department of Medicaid Caseload Reports, February, 2017. http://www.healthpolicyohio.org/wp-content/uploads/2017/04/MedicaidBasics_2017_ExecutiveSummary_Web.pdf

[26] Ohio Department of Medicaid. “Ohio Medicaid Group VIII Assessment: A Report to the Ohio General Assembly.” January, 2017. http://medicaid.ohio.gov/portals/0/resources/reports/annual/group-viii-assessment.pdf

[27] Health Affairs. “MetroHealth Care Plus: Effects of a Prepared Safety Net on Quality of Care in a Medicaid Expansion Population.” Randall Cebul, et al. July, 2015.

[28] Ohio Department of Medicaid. “Ohio Medicaid Group VIII Assessment: A Report to the Ohio General Assembly.” January, 2017.

[29] Kaiser Family Foundation. “The Effects of Medicaid Expansion Under the ACA: Findings from a Literature Review.” Larisa Antonisse, et al. June 20, 2016. http://kff.org/medicaid/issue-brief/the-effects-of-medicaid-expansion-under-the-aca-findings-from-a-literature-review/

[30] Ohio Department of Medicaid. “Ohio Medicaid Group VIII Assessment: A Report to the Ohio General Assembly.” January, 2017.

[31] ASPE Office of Health Policy. “Impacts of the Affordable Care Act’s Medicaid Expansion on Insurance Coverage and Access to Care.” June 20, 2016.

[32] The Plain Dealer. “Republican Healthcare Plan's Impact on Medicaid Expansion Worries Hospitals, Lawmakers.” March 8, 2017.

http://www.cleveland.com/healthfit/index.ssf/2017/03/republican_healthcare_plans_im.html

[33] Based on data from CMS (Form 64), as of December 2016. Distribution of Medicaid Spending by Service, FY 2015: http://kff.org/medicaid/state-indicator/distribution-of-medicaid-spending-by-service/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D

[34] Uncompensated care is care provided by hospitals to un- and underinsured patients that is not reimbursed.

[35] Center on Budget and Policy Priorities. “Frequently Asked Questions About Medicaid.” Edwin Park et al. January 21, 2016. http://www.cbpp.org/research/health/frequently-asked-questions-about-medicaid

[36] Kaiser Family Foundation. “What Difference Does Medicaid Make? Assessing Cost Effectiveness, Access, and Financial Protection Under Medicaid for Low-Income Adults.” May, 2013. https://kaiserfamilyfoundation.files.wordpress.com/2013/05/8440-what-difference-does-medicaid-make2.pdf

[37] Kellogg Institute, Northwestern University. “Who Bears the Cost of the Uninsured? Nonprofit Hospitals.” June 22, 2015. https://insight.kellogg.northwestern.edu/article/who-bears-the-cost-of-the-uninsured-nonprofit-hospitals

[38] Ibid.

[39] Policy Matters Ohio. “Repeal of Health Law Threatens Ohioans.” Wendy Patton, January 11, 2017.

[40] U.S. Department of Health & Human Services. “Insurance Expansion, Hospital Uncompensated Care, and the Affordable Care Act.” March 23, 2015.

[41] American Hospital Association. “Uncompensated Hospital Care Cost Fact Sheet.” December, 2016.

[42] ASPE Office of Health Policy. “Impacts of the Affordable Care Act’s Medicaid Expansion on Insurance Coverage and Access to Care.” June 20, 2016.

[43] http://khn.org/news/cleveland-clinic-reports-40-drop-in-charity-care-after-medicaid-expansion/

[44] Cleveland Clinic. “State of the Clinic, 2016.” https://my.clevelandclinic.org/-/scassets/files/org/about/who-we-are/state-of-the-clinic-2016.ashx

[45] Economic Policy Institute. “The AHCA’s Drag on Potential Job Growth.” Josh Bivens, March 24, 2017. http://www.epi.org/publication/how-many-jobs-could-the-ahca-cost-your-state/

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2017Affordable Care ActMedicaid

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