Researchers warn that a Centers for Medicare & Medicaid Services program to subsidize low-income patients’ care is failing to equitably support hospitals in areas with historically underserved Black communities.
Allocations of the $24 billion-per-year disproportionate share hospital (DSH) program are largely structured around two measures of healthcare use by low-income patients: a hospital’s Medicare/Medicaid patients with low incomes and those with low incomes but not on Medicare/Medicaid.
However, minority groups often have lower utilization than others despite similar needs due to structural barriers to care, Cornell University’s William Schpero and the University of Pennsylvania’s Paula Chatterjee, M.D., wrote in a recent JAMA Network Open research letter.
With this in mind, the pair conducted an analysis that found counties with greater proportions of Black residents had significantly higher rates of uncompensated hospital care and a greater percentage of uninsured residents compared to other counties with acute care hospitals that received the same amount in Medicare and Medicaid DSH payments per resident.
Compared to their DSH payment peers, those disproportionately Black counties also had significantly higher rates of premature mortality and a greater percentage of residents who reported poor or fair health.
“These findings suggest that DSH programs, by relying on measures of patient characteristics that reflect healthcare use, may structurally disadvantage communities that most require resources to improve population health,” Schpero and Chatterjee wrote in the journal.
The study used Medicare and Medicaid DSH payments collected from the 2019 Healthcare Cost Report Information System and 2015 State Plan Rate Year files, which the researchers said were the most recent years for which full data were available, for all states but Massachusetts.
They compared measures of health disadvantages and care costs for low-income patients (“an explicit target of DSH programs") between two bodies of U.S. counties: one group of 588 counties in which Black residents comprised an average 28.6% of the population in 2019, and the 1,766 remaining counties in which Black residents represented 2.5% of their county’s population.
Of note, Schpero and Chatterjee found that the DSH formula allocated more total funding to disproportionately Black counties. Per resident Medicare and Medicaid DSH payments were $9 and $52, respectively, in disproportionately Black counties as opposed to $4 and $20 in the other counties.
Comparing counties between the two groups with equivalent per-resident DSH payments made the disparities more apparent. Uncompensated care rates among disproportionately Black counties were 2% higher and 1.4% between similarly paid Medicare DSH and Medicaid DSH counties.
With constant per-patient Medicare DSH and Medicaid DSH payments, disproportionately Black counties also demonstrated 2.5 and 2.3 percentage points more uninsured residents, 75.8 and 64.2 more deaths per 100,000 residents and 3.6 and 3.6 percentage points more residents reporting poor or fair health.
Schpero and Chatterjee acknowledged that their analysis didn’t consider other supplemental hospital payments or examine potential heterogeneity in DSH allocations at the state level.
“Nonetheless, these findings suggest that policymakers should consider measures not based on health care use to ensure more equitable targeting of DSH payments or additional allocations to historically underserved communities,” they wrote.