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

09/01/2002

Five states together receive almost half of the total amount of DSH funds: 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).

For the acute care hospitals in our analysis file, DSH payments based on actual Medicare FY 1998 payments and the federal share of DSH payments totaled $9.3 billion.

  • Across all hospitals, the joint DSH payments raise total margins from 1.9% to 4.7%.
  • Urban hospitals receive 94% of the DSH funds.
  • 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).

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