Reforming the Medicaid disproportionate share hospital program

Area of Science:

• Health Policy
• Healthcare Finance
• Public Health

Background:

• Federal laws since 1991 aimed to reform the Medicaid disproportionate share hospital (DSH) program.
• The DSH program supports safety net hospitals serving vulnerable populations.
• Understanding program dynamics is crucial for healthcare access and financial stability of safety net providers.

Purpose of the Study:

• To analyze the Medicaid DSH program and supplemental payment structures in 1997.
• To assess changes in DSH revenue and expenditure composition between 1993 and 1997.
• To identify persistent variations in DSH program utilization across states.

Main Methods:

• A 40-state survey was conducted in 1997.
• Data on Medicaid DSH and supplemental payment programs were collected.
• Analysis focused on changes in fund allocation and state retention.

Main Results:

• The overall size of the Medicaid DSH program remained stable from 1993 to 1997.
• A significant shift occurred, with a higher proportion of DSH funds directed to local hospitals.
• States retained a smaller share of DSH funds, indicating a change in fiscal management.

Conclusions:

• Medicaid DSH program reforms have altered fund distribution patterns.
• Despite federal efforts, substantial state-specific differences in DSH program implementation and impact endure.
• Further research is needed to understand the long-term implications of these shifts for safety net hospitals.