Hospital costs and profitability related to the Patient Protection and Affordable Care Act

Abstract

On March 23, 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act (PPACA). This law was one of the most controversial and transforming pieces of legislation impacting health care delivery in recent history. The legislation was created in response to rising health care costs and the belief that, in part, cost shifting of indigent uninsured care to paying patients would reduce the overall costs of health care. The recent Supreme Court decision upholding the individual mandate portion of the law is expected to significantly reduce the number of uninsured. Using operational data from 212 hospitals in California, this study examines the anticipated impact on hospital costs, profitability, and some patient outcome benchmarks from the restructuring of health care delivery in the United States by the PPACA.