Ways that Medicaid Discounting Cause Hardships – Virginia Mason Medical Center

Select a health care facility or service that accepts Medicaid. Identify ways that Medicaid discounting can cause hardships on the type of facility that you selected. Write a 825-word paper that explores how Medicaid participation has affected organizational finances and what can be done to reduce any loss incurred.

Virginia Mason Medical Center- Accepting Medicaid Patients

Virginia Mason Medical Center located in Seattle, Washington is a medical center that has more than 470 doctors, 336 hospital beds, 8 medical centers, research center, primary care, cancer, and heart care. This medical institution accepts Medicaid patients. Medicare is a federal program that gives and provides health coverage to persons >65 years or < 65 and have a disability regardless of your income. Medicaid is both federal and state program that provides health coverage when one has very low income. Both of these programs work synergistically to lower costs for the patients.

The beneficiaries must be either citizens of the US or certain qualified non-citizens such those that are lawful permanent residents. This program provides health coverage to tens of millions of citizens, including eligible elderly adults, low-income adults, pregnant women and disabled people (Fund, 2018). This program is philanthropic but has major setbacks to the facilities that offer the Medicaid services. The key to reducing losses from treating patients covered with Medicaid is by minimizing the operating expenses of the facility.


Medicaid discounting has significant challenges and hardships on Virginia Mason Medical Center. In the states that impose work requirements, fewer covered Medicaid beneficiaries implies that the facilities will incur reduced revenues, have smaller operating margins and have increased uncompensated care costs. These effects will vary in each state depending on the payer mix, and the program design problems such as age limits.

The number of enrollees who become uninsured Medicaid beneficiaries will lose their coverage with the health insurance if they are unable to find work, cannot document their work activity hours or cannot document on exemption. This makes it hard for the hospital to earn anything from these beneficiaries. Their loss of coverage by the federal and state will affect the hospital by decreasing the revenue and increasing the uncompensated care costs (Hoffman, 2018).The impact of this adverse effects will affect the entire community that is served by the hospital because the hospital will need to cut on the number of staff or eliminate crucial healthcare services so as to in a position to run the hospital. There will be high levels of increased uncompensated care, significantly making it hard to operate the medical centers effectively and efficiently.

Medical centers that are located in states with high Medicaid payer mix are more reliant on the Medicaid revenues and will suffer the most that those that are states with lower Medicaid payer mix. States that subject many enrollees to work requirements by increasing the age limits will be more adversely affected. If most enrollees are uninsured by losing their Medicaid coverage, the hospital uncompensated care costs will exponentially rise and the operating margins subsequently decline.

Medical centers and hospitals that are located in rural areas and implement the Medicaid work requirements will be most affected by this loss (Fund, 2018). They will be adversely impacted because of the design of the program, which applies work requirements to both traditional and expansion eligible beneficiaries up to age 64 therefore, leaving most citizens out of the health coverage. Effecting work requirements will additionally decrease operating margins for these already stressed medical centers. Recently, hospitals located in rural areas have been closing at an alarming rate; this is intensified by a reduction in operating margins issue.

Solutions and recommendations

Solutions and relevant mechanisms need to be implemented to reduce any loss incurred in Virginia Mason Medical Center. To remedy the massive losses and reduce on the operating margins, the hospital leadership ought to use analytics to identify ways to improve profitability, reduce costs of corporate services, sanction the buying and usage of medical technology, come up with standard clinical protocols and push the health care providers to adhere to them.

The institution can use data analytics to develop a pathway to increasing profits. This can be done by 5%-15% expense reduction by forecasting cost elements on administration and in care provision. The facility should curb spending on corporate services by taking advantage of economies of scale. The hospital leadership needs to get control of all the overhead costs and create a corporate service model that is responsive and efficient, tailored to match the needs of the facility (Hilferty, 2018). This can be done by sorting out the suitable level of the organization that is responsible for all main functions and making all decisions made to be clear and right. It is critical to gauge if it is less costly to outsource some functions or provide them in-house.

The hospital needs to tighten its purchase and use of modern technology by making sure they only buy what is most needed and purchasing efficiently from one vendor. It is important for all hospitals to engage their workers in evidence-based reviews of their technology purchases, make sure they achieve consensus across all employees and use their economic leverage to decrease procurement prices. They can also be vigilant in tightening drug formularies in the pharmacies and use alternatives of the best available scientific evidence to lower the cost of procuring drugs.

Virginia Mason Medical center needs to blueprint episodes of care to treat common problems. Variation in the way physicians handle a similar medical condition can lead to Medicare losses. It is critical that the hospital gives choreographed care through scientifically-derived protocols (Collins et al, 2018). The hospital management has to make sure that the blueprint is adhered to. This creates clinical discipline. Conclusively, it is essential to adhere to all these steps to achieve and maintain control over the hospital finances. The key to reducing losses from treating patients covered with Medicaid is by minimizing the operating expenses of the facility. In case there are any federal deficits and corporate benefits costs increase, these strategies can chip in and salvage the situation avoiding financial upheavals in the facility. These strategies will result in better clinical outcomes financially. This will ensure that the hospital improves its margin in the presence of demanding payment constraints.

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