Health services research
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Health services research · Jun 1998
Medicaid-dependent hospitals and their patients: how have they fared?
To examine how private hospitals dependent on Medicaid for a large proportion of their revenues have fared in the face of substantial Medicaid (and more modest Medicare) reimbursement cutbacks and growing managed care. We specifically test three hypotheses regarding Medicaid-dependent hospitals: (1) that they are more likely to "cost-shift" cutbacks to private patients; (2) that they are more likely to cut services for Medicaid (and other) patients; and (3) that they are more likely to close. DATA/STUDY SETTING: Private short-term hospitals in California a state that has experienced a rapid growth in managed care since the early 1980s. Data are drawn from the California Office of Statewide Health Planning and Development (OSHPD) Hospital Disclosure Files for fiscal years 1983 and 1992. ⋯ It been suggested that private hospitals may respond to public reimbursement cutbacks by simply "shifting" costs to privately insured patients, limiting overall cost savings but insulating public patients and hospitals from the effects of cutbacks. We find no evidence of cost shifting. Rather, our results suggest that patients and hospitals bore the brunt of cutbacks; service levels fell at Medicaid-dependent hospitals and such hospitals were more likely to go out of business. This suggests that the consequences of proposed Medicare and Medicaid cutbacks could be severe for public patients and the hospitals that care for them.