Milwaukee’s Aurora Health Care saw its operating income and profits rise in 2014, beating expectations. This is largely due to the Affordable Care Act’s public exchanges and Wisconsin Governor Scott Walker’s Medicaid expansion plan. In addition, the non-profit health system recently announced plans to make significant investments in a number of health facilities throughout Wisconsin.
As Aurora CFO Gail Hanson told the Milwaukee Business Journal’s Rich Kirchen, the gains in operating income were primarily driven by its strategic approach to health care reform. First, Aurora worked with insurers that sell policies on the public exchanges, including Anthem Blue Cross and Blue Shield, Common Ground, UnitedHealthcare, and WPS, to deliver access to Aurora’s network of clinics and hospitals. Increased enrollment in the public exchange plans that include Aurora’s network has given more people access to Aurora providers, which increased patient volumes, reduced uncompensated care, and grew Aurora’s revenues by about 11%.
Second, Aurora delivered less uncompensated care to childless adult patients with incomes at or below the federal poverty level. Many of these patients were uninsured and frequently unable to pay their bills before Governor Walker expanded Medicaid in Wisconsin. Now, providers like Aurora receive Medicaid reimbursements for services provided to these patients. Although Medicaid reimbursements are only about half of what a commercial insurer would pay, half is better than nothing.
Because Aurora is a non-profit, much of its operating profit will be invested back into the organization through construction projects and paying down debt. Aurora has announced a number of large building projects in the past year, including outpatient surgery centers in Germantown, Sheboygan, Delavan, and Burlington. Aurora also plans to remodel operating rooms at St. Luke’s Hospital in Milwaukee.