Hospitals That Serve Many Black Patients Have Lower Revenues and Profits: Structural Racism in Hospital Financing

Abstract

Background Care for Black patients is concentrated at a relatively small proportion of all US hospitals. Some previous studies have documented quality deficits at Black-serving hospitals, which may be due to inequities in financial resources for care. Objective To assess disparities in funding between hospitals associated with the proportion of Black patients that they serve. Participants All Medicare-participating hospitals, 2016–2018. Main Measures Patient care revenues and profits per patient day at Black-serving hospitals (the top 10% of hospitals ranked by the share of Black patients among all Medicare inpatients) and at other hospitals, unadjusted and adjusted for differences in case mix and hospital characteristics. Key Results Among the 574 Black-serving hospitals, an average of 43.7% of Medicare inpatients were Black, vs. 5.2% at the 5,166 other hospitals. Black-serving hospitals were slightly larger, and were more often urban, teaching, and for-profit or government (vs. non-profit) owned. Patient care revenues and profits averaged $1,736 and $−17 per patient day respectively at Black-serving hospitals vs. $2,213 and $126 per patient day at other hospitals (p<.001 for both comparisons). Adjusted for patient case mix and hospital characteristics, mean revenues were $283 lower/patient day (p<.001) and mean profits were $111/patient day lower (p<.001) at Black-serving hospitals. Equalizing reimbursement levels would have required $14 billion in additional payments to Black-serving hospitals in 2018, a mean of approximately $26 million per Black-serving hospital. Conclusions US hospital financing effectively assigns a lower dollar value to the care of Black patients. To reduce disparities in care, health financing reforms should eliminate the underpayment of hospitals serving a large share of Black patients.

Patient and Hospital Characteristics Associated With Delayed Diagnosis of Appendicitis

“…32 There is some evidence that patients receive lower-quality care at hospitals serving more racial and ethnic minority patients and that the structure of US hospital financing assigns lower value (in the form of reimbursements) to hospitals that serve a higher proportion of Black patients. 19,20,32 Racial and ethnic minority patients who receive care at hospitals serving more racial and ethnic minority individuals may benefit from racial and ethnic or language concordance, which has been shown to improve patient experience and outcomes. 33,34 Another possibility is that hospitals serving more racial and ethnic minority patients may have more culturally competent means of caring for diverse patients, especially those who disproportionately experience worse outcomes.…”

“…Of note, care for Black patients is concentrated in a relatively small portion of US hospitals, with those more frequently being teaching, for profit, or government owned and located in urban settings . There is some evidence that patients receive lower-quality care at hospitals serving more racial and ethnic minority patients and that the structure of US hospital financing assigns lower value (in the form of reimbursements) to hospitals that serve a higher proportion of Black patients . Racial and ethnic minority patients who receive care at hospitals serving more racial and ethnic minority individuals may benefit from racial and ethnic or language concordance, which has been shown to improve patient experience and outcomes .…”

“…Finally, we found that presenting to a hospital with a greater percentage of discharges of Black and Hispanic patients was associated with lower rates of delayed diagnosis. Of note, care for Black patients is concentrated in a relatively small portion of US hospitals, with those more frequently being teaching, for profit, or government owned and located in urban settings . There is some evidence that patients receive lower-quality care at hospitals serving more racial and ethnic minority patients and that the structure of US hospital financing assigns lower value (in the form of reimbursements) to hospitals that serve a higher proportion of Black patients .…”

A Nominal Group Technique Study of Patients Who Identify as Black or African American and Access to Renal Transplantation

“…A recent study discovered a disparity in earnings for hospitals that primarily serve Black patients relative to other hospitals, which may affect the standards of care offered to patients. 30 This emphasizes the value of using a multifaceted approach to curtail inequities in access to renal transplantation, which accounts for the ways in which institutional and structural racism (eg, residential segregation inherited from discriminatory practices such as redlining) contribute to these inequities. 11,30 There are a few limitations of the present study worth noting.…”

“…30 This emphasizes the value of using a multifaceted approach to curtail inequities in access to renal transplantation, which accounts for the ways in which institutional and structural racism (eg, residential segregation inherited from discriminatory practices such as redlining) contribute to these inequities. 11,30 There are a few limitations of the present study worth noting. Patients were recruited from a single center, indicating that some of the factors identified may not generalize to other centers.…”