The Oklahoman reported this week that Mercy, the sixth-largest Catholic health care system in the US, would be laying off hundreds of employees.  Mercy said the “lack of Medicaid expansion in most of the states we serve” was a primary reason for the layoffs.  The other states affected by Mercy’s decision include Arkansas (where Medicaid was expanded through private health plans), Kansas and Missouri (both of which have so far refused the federal dollars for expansion).

This wasn’t new news in Oklahoma where, last year, Tulsa’s St. John Health System announced layoffs for 2-3% of its workforce because of the state’s decision not to expand Medicaid.

While there have been many reports of layoffs and hospital closings in states that haven’t accepted the federal money to expand coverage, this represents a new front where states that have expanded – like Arkansas – are suffering because so many of their neighbors have decided not to expand coverage.  Development of larger hospital systems that span multiple states has both advantages and pitfalls – and the ripple effect of some states refusing federal dollars for Medicaid coverage is clearly one of the downsides.