Analysis of the Joint Distribution of Disproportionate Share Hospital Payments. Distribution of Total DSH Payments


Five states together receive almost half of the total amount of DSH payments: California (16.7%), New York (12.7%), Texas (9.3%), New Jersey (5.7%), and Louisiana (4.3%). At the same time, these states have only 28% of the total adjusted patient days (7.9, 9.7, 5.8, 2.7, and 1.9 %, respectively) (Table ES.2).

Table ES.2 Joint Distribution of DSH Payments State, FY 1998 ($ millions)

In Table ES.3, we summarize the distribution of DSH payments to the acute care hospitals in our analysis file by hospital characteristics. For the Medicaid component of the DSH payment, we have used only the federal share of DSH payments.

  • Across all hospitals, the joint DSH payments raise total margins from 1.9% to 4.7%.
  • State and county-owned hospitals receive 13% of Medicare DSH payments and 48% of Medicaid payments.
  • Using Medicare SSI and Medicaid days as the measure of low-income patients, 50% of Medicare payments and 64% of Medicaid payments are to hospitals with at least 30% low- income patients. Except for the highest categories, the average DSH payment per discharge increases as the percentage of low-income patients increases.
  • 37% of Medicare DSH payments and 63% of Medicaid payments are to hospitals with a Medicaid utilization rate that is above one standard deviation from the state average. The average DSH payment per discharge increases by hospital quartile (the first quartile is the lowest quartile of acute care hospitals in the state based on Medicaid utilization).
  • Generally, the average DSH payment per discharge increases as hospital margins decline. The exceptions are the hospital classes with the highest and lowest margins.
  • About 53% of Medicare DSH payments and 24% of Medicaid payments went to hospitals that had positive margins prior to taking DSH payments into account.Table ES.3 Distribution of DSH Payments ($ millions) and Impact onTotal Margins by Acute Care Hospital Categories

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