Analysis of the Joint Distribution of Disproportionate Share Hospital Payments. Areas for Additional Research

09/01/2002

Absent a national database with uncompensated care data and other information needed to develop measures of financial risk, three areas of investigation could be pursued that would provide valuable information related to federal support for hospitals that provide a disproportionate share of care to poor patients.

Update the analysis of the current distribution of DSH payments and expand the in-depth state analyses to include additional states that require hospitals to report uncompensated care information.

  • Examine market-level issues related to DSH funding such as how the low-income patient burden shared by the hospitals within a market area and whether it varies by type of payer and type of service.
  • Investigate the characteristics of hospitals with large indigent care loads that incur substantial financial risk yet are financially viable. This would include looking at the impact of state and local indigent care programs and other subsidies such as Medicare’s indirect teaching adjustment.

A national database is needed to fully understand the potential impact of alternative allocation policies at both the national and market levels. Having the national database would facilitate:

  • A multi-variate analysis of the factors affecting a hospital’s financial risk and its overall financial status using a broader set of hospitals could help identify additional factors that should be considered in an allocation policy.
  • An evaluationof inter-state redistributions that would occur under alternative DSH financing policies, including the types of policies examined in this paper as well as additional ones that would take into account a state’s ability to finance indigent care and/or market-level factors.

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