Analysis of the Joint Distribution of Disproportionate Share Hospital Payments. Specialized Care

09/01/2002

Researchers have also identified safety net hospitals as those that provide selected types of services such as emergency room care or trauma care. Here, the argument is that safety net hospitals often provide services that are either too expensive for other hospitals to provide, unprofitable, or attract patients that may be considered undesirable and thus should be compensated (Gage 1998; Gaskin 1998). In addition, targeting DSH payments based on the provision of selected services may be a way to encourage hospitals to provide such services that they may have not provided otherwise or to continue to operate in an area that they might not otherwise (ProPAC 1994). Baxter and Mechanic, for example, used emergency room used as indicator of hospitals' safety net role (Baxter and Mechanic 1997). Specifically, they examined hospitals that provided the top 10 percent of emergency room visits in a given market. A common element in several states' DSH programs is targeting payments to selected facilities such as children's hospitals or hospitals located in medically underserved areas. Similarly, the Medicare DSH program gives special consideration to the market a hospital operates in--for example, rural referral centers and sole community hospitals.

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