HIDI HealthStats | July 2014

Economic and Financial Stresses on Missouri Hospitals

The Missouri Hospital Association conducts an annual financial stress test of its member hospitals. The Missouri Hospital Stress Test was developed in response to the extraordinary fiscal pressures facing hospitals as a result of the dynamic contemporary policy landscape in the United States and in Missouri. New federal policies, such as the Medicaid disproportionate share payment reductions, various Medicare reimbursement cuts arising through the Affordable Care Act and subsequent legislative activity, coupled with Medicare sequestration are increasing the solvency pressure faced by hospitals. This pressure is compounded by accountability policies, such as the community health needs assessment, pay for performance and hospital readmission reduction programs, that require hospitals to improve care for patients and the community while reducing health care spending. At the same time, hospitals are treating more uninsured and underinsured patients than ever before, with little or no compensation. In Missouri, hospitals’ fiscal pressures also continue to be exacerbated by the failure of Missouri’s legislature to reform and expand Medicaid.

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