Creative payment strategy helps ensure a future for teaching hospitals.

Area of Science:

• Health Economics
• Public Health Policy
• Healthcare Finance

Background:

• Colorado Medicaid historically used Disproportionate Share Hospital (DSH) payments to support safety-net hospitals and patient access.
• Legislative and regulatory changes have significantly limited traditional DSH financing options.

Purpose of the Study:

• To evaluate the effectiveness of the Major Teaching Hospital (MTH) payment program as an alternative Medicaid financing strategy in Colorado.
• To assess the financial impact of the MTH program on teaching hospitals and the state.

Main Methods:

• Analysis of the implementation and financial outcomes of Colorado's Major Teaching Hospital (MTH) payment program between 1991 and 1997.
• Examination of net payment distributions and federal funding acquired through the MTH program.

Main Results:

• The MTH payment program distributed $131 million in net payments to two major Colorado teaching hospitals.
• This initiative secured $69.5 million in federal Medicaid funding for the state that would not have been otherwise obtained.

Conclusions:

• The Major Teaching Hospital (MTH) payment program served as a successful creative financing strategy for Colorado's Medicaid program.
• The MTH program provided crucial funding for teaching hospitals' programs and low-income patient care while leveraging federal resources.