Did Budget Cuts in Medicaid Disproportionate Share Hospital Payment Affect Hospital Quality of Care?

Abstract

Background Medicaid Disproportionate Share Hospital (DSH) payments are one of the major sources of financial support for hospitals providing care to low-income patients. However, Medicaid DSH payments will be redirected from hospitals to subsidize individual health insurance purchase through US national health reform. Objectives The purpose of this study is to examine the association between Medicaid DSH payment reductions and nursing-sensitive and birth-related quality of care among Medicaid/uninsured and privately insured patients. Research Design and Method Economic theory of hospital behavior was used as a conceptual framework, and longitudinal data for California hospitals for 1996–2003 were examined. Hospital fixed effects regression models were estimated. The unit of analysis is at the hospital-level, examining two aggregated measures based on the payer category of discharged patients (i.e., Medicaid/uninsured and privately insured). Principal Findings The overall study findings provide at best weak evidence of an association between net Medicaid DSH payments and hospital quality of care for either Medicaid/uninsured or the privately insured patients. The magnitudes of the effects are small and only a few have significant DSH effects. Conclusions Although this study does not find evidence suggesting that reducing Medicaid DSH payments had a strong negative impact on hospital quality of care for Medicaid/uninsured or privately insured patients, the results are not necessarily predictive of the impact national health care reform will have. Research is necessary to monitor hospital quality of care as this reform is implemented.

The impacts of the 340B Program on health care quality for low‐income patients

“…The rate of obstetric trauma with an instrument was 13.7%, and the rate of obstetric trauma without an instrument was 2.2%. Consistent with other work, [36][37][38] obstetric trauma rates were on average lower (better) in the Medicaid and uninsured population relative to all patients.…”

“…Additionally, this work contributes to a more general literature that studies the effects of programs that free up funds for hospitals serving Medicaid and uninsured populations but provide no incentives to use them to improve care for those patients. This body of work, which has examined policies such as DSH payments 36,41,42 and the 1997 Balanced Budget Act (BBA)'s broad‐based Medicare hospital payment cuts, 16,43 has found mixed evidence on whether unrestricted cross‐subsidization improves care. In particular, without correction for multiple comparisons, our findings are consistent with previous research demonstrating that AMI‐related outcomes may be sensitive to changes in financial surplus 16,41,43,44 .…”

A Brighter Future? The Impact of Insurance and Socioeconomic Status on Cancer Outcomes in the USA: A Review

“…With an increasing proportion of the population gaining insurance coverage, the ACA projects fewer uninsured admissions at safety net hospitals and will thus make significant cuts to DSH funding. Some health policy experts, however, question the sustainability of safety net hospitals without full DSH funding [30][31][32]. This is of particular concern in states that have chosen not to participate in the Medicaid expansion and therefore experience disproportionally high rates of uninsured individuals and for high-cost medical conditions such as cancer.…”

The impact of underinsurance on bladder cancer diagnosis, survival, and care delivery for individuals under the age of 65 years

“…These hospitals bear the majority of the responsibility for caring for the underinsured in the United States, and they are challenged with high patient demand and decreasing funding . Federal assistance for these hospitals through disproportionate‐share hospital payments was slated to decrease gradually; this was to be balanced by the projected rise in coverage expansion under the Affordable Care Act . However, this expected coverage expansion has not met its projections in light of contention surrounding the Affordable Care Act's implementation.…”