Analysis of the Joint Distribution of Disproportionate Share Hospital Payments. Hospital Characteristics

09/01/2002

Hospital capacity and services: We used the Medicare Provider of Service file and the AHA survey public data to determine basic hospital characteristics such as type (e.g., general acute care, children's, long-term), ownership, and bed size. We used the Medicare cost report to determine the number of FTE residents and teaching intensity.

Hospital utilization: We used the Medicare cost report and/or AHA survey public data to determine inpatient days and discharges for Medicare and Medicaid patients and all patients. (Other utilization data by payer, e.g. self- pay inpatient days and outpatient visits, is not available from the AHA survey data.) We used the AHA's adjusted days as an overall measure of hospital capacity.5

Low-income patient measures: Development of low-income measures is hampered by lack of available data. We developed different measures based on available data that enabled us to assess the distributional impact of using different definitions of financially vulnerable safety net hospitals.

All acute care hospitals. We used the Medicare cost report data to generate Medicare and Medicaid utilization statistics for all acute care hospitals. We applied the SSI percentage to the Medicare days to estimate low-income Medicare days. We used these data in evaluating the current distribution of DSH payments (Chapter 4).

1998 HCUP national database. We constructed inpatient measures determining:

  • number and proportion of inpatient days/discharges for self pay patients, Medicaid patients and other government patients likely to be indigent;
  • case mix for all patients and by payer category; and,
  • total inpatient charges by payer category.

We used these data in analyses exploring the implications of using different utilization measures to allocate DSH funds (Chapter 7).

Three-state analysis. We used the databases for California, New York and Wisconsin hospitals for an in-depth analysis of the sensitivity of the allocations to using different measures (Chapter 8). The state financial data have detailed information by payer source on inpatient and outpatient gross revenues and on uncompensated care. In addition, we had access to 100% of their 1997 inpatient claims through HCUP. Our measures from the financial statements included:

  • bad debt and uncompensated care
  • Medicaid shortfalls
  • Medicaid "new" DSH funds (payments net of provider contributions) paid to each hospital

5.  The adjusted days reflect the number of days of inpatient care, plus an estimate of the volume of outpatient services, expressed in units equivalent to an inpatient day in terms of level of cost. Outpatient services are converted to the equivalent number of inpatient days by multiplying the number of outpatient visits by the ratio of outpatient revenue per outpatient visit to inpatient revenue per inpatient day.

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