Analysis of the Joint Distribution of Disproportionate Share Hospital Payments. 8: Three State Analysis of Alternative DSH Policies


In this chapter, we discuss the results of our analyses using the HCUP SID and detailed financial data for hospitals located in California, New York, and Wisconsin. We chose these states because they participate in HCUP, require uniform financial reporting systems, have different types of Medicaid DSH programs and, perhaps most importantly, hospital-specific information is available on intergovernmental transfers and other DSH contributions made by the hospitals. By linking the claims and financial data for the hospitals in these states, we are able to:

  • Trace the actual distribution of "new" Medicaid DSH funds.
  • Estimate funds retained by the states.
  • Assess how well the claims-generated measures of low-income patients correspond to measures generated from financial data (e.g. proportion of self-pay and no-charge patients relative to bad debt and uncompensated care); and,
  • Compare how well the current and alternative DSH allocation policies target financially vulnerable safety net hospitals. In this regard, we were able to examine how funds might be redistributed across classes of hospitals, but because only three states were involved, we could not estimate the redistributions that might occur across states under the different alternatives.

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