A profile of uncompensated hospital care, 1983-1995

The Impact of Financial Assistance Programs on Health Care Utilization: Evidence from Kaiser Permanente

Most hospitals have financial assistance programs for low-income patients. We use administrative data from Kaiser Permanente to study the effects of financial assistance on healthcare utilization. Using a regression discontinuity design based on an income threshold for program eligibility, we find that financial assistance increases the likelihood of an inpatient, ambulatory and emergency department encounter by 3.6 pp (59%), 13.4 pp (20%), and 6.7 pp (53%), respectively, though effects dissipate three quarters after program receipt. Financial assistance also increases the detection and management of treatment-sensitive conditions (e.g., drugs treating diabetes), suggesting financial assistance may increase receipt of high-value care.

The Balanced Budget Act of 1997 and U.S. Hospital Operations

The Balanced Budget Act (BBA) of 1997 initiated several changes to Medicare payment policy in an effort to slow the growth of hospital Medicare payments and ensure the future of the Medicare Hospital Insurance Trust Fund. Although subsequent federal legislation relaxed some original proposals, restored funds were limited and directed to specific types of hospitals. In addition, these Medicare policy changes came at a time when hospitals faced private sector payment constraints. This paper assesses the short-term effects of the BBA on operations of nonprofit hospitals in the United States and compares these effects to those observed in the early 1980s during implementation of the Medicare prospective payment system (PPS). We found that some operational changes instituted by hospitals facing financial pressures from the BBA were similar to those observed for hospitals that faced pressure from Medicare PPS, including efforts to contain Medicare cost growth, to expand outpatient service provision, and to contain hospital staffing. However, during PPS implementation hospitals experienced declining inpatient use and growing profit margins, whereas post-BBA hospitals experienced growing inpatient use and declining margins.

Paying Their Way? Do Nonprofit Hospitals Justify Their Favorable Tax Treatment?

This study addresses the effect of hospital ownership on the delivery of services to medically indigent patients and on their communities, using two alternative definitions of community benefits. Using data from hospitals in California, the study finds that in similar markets, the amount of community benefits provided by a tax-exempt private hospital is equivalent in value to that provided by an investor-owned hospital. These results are sensitive to the definition of community benefits, thus indicating need for a more explicit identification and minimum standard of the community benefits expected of nonprofit hospitals in return for their special tax treatment.

Latino Population Growth and Hospital Uncompensated Care in California

OBJECTIVES

We examined the association between the size and growth of Latino populations and hospitals' uncompensated care in California.

METHODS

Our sample consisted of general acute care hospitals in California operating during 2000 and 2010 (n = 251). We merged California hospital data with US Census data for each hospital service area. We used spatial analysis, multivariate regression, and fixed-effect models.

RESULTS

We found a significant association between the growth of California's Latino population and hospitals' uncompensated care in the unadjusted regression. This association was still significant after we controlled for hospital and community population characteristics. After we added market characteristics into the final model, this relationship became nonsignificant.

CONCLUSIONS

Our findings suggest that systematic support is needed in areas with rapid Latino population growth to control hospitals' uncompensated care, especially if Latinos are excluded from or do not respond to the insurance options made available through the Affordable Care Act. Improving availability of resources for hospitals and providers in areas with high Latino population growth could help alleviate financial pressures.

The effect of minimum nurse staffing legislation on uncompensated care provided by California hospitals

This study assesses whether California's minimum nurse staffing legislation affected the amount of uncompensated care provided by California hospitals. Using data from California's Office of Statewide Health Planning and Development, the American Hospital Association Annual Survey and InterStudy, the authors divide hospitals into quartiles based on preregulation staffing levels. Controlling for other factors, they estimate changes in the growth rate of uncompensated care in the three lowest staffing quartiles relative to the quartile of hospitals with the highest staffing level. The sample includes short-term general hospitals over the period 1999 to 2006. The authors find that growth rates in uncompensated care are lower in the first three staffing quartiles as compared with the highest quartile; however, results are statistically significant only for county and for-profit hospitals in Quartiles 1 and 3. The authors conclude that minimum nurse staffing ratios may lead some hospitals to limit uncompensated care, likely due to increased financial pressure.

Tax-exempt hospitals and community benefits: a review of state reporting requirements

In June 2007 the Internal Revenue Service proposed a major overhaul of its reporting requirements for tax-exempt hospitals and released draft Form 990 (the IRS form filed by tax-exempt organizations each year). In December 2007 the IRS promulgated the final Form 990 after incorporating some of the recommendations made in the almost seven hundred public comments on the discussion draft. One recommendation adopted in the final Form 990 is the postponement until tax year 2009 (returns filed in 2010) of the requirement for hospitals to submit detailed information on the percentage of total expenses attributable to charity care, unreimbursed Medicaid costs, and community-health improvement programs (the discussion draft required this information for tax year 2007). Although the IRS will not require tax-exempt hospitals to provide detailed information about community benefits until the 2009 tax year, sixteen states have laws requiring tax-exempt hospitals to enumerate the benefits that they provide to the community. Information about the impact of these laws on the provision of community benefits (e.g., charity and uncompensated care) is examined in this study whose primary purpose is to highlight information policy makers may glean from states that have adopted community-benefit reporting laws.

Hospital financial condition and the quality of patient care

Concerns about deficiencies in the quality of care delivered in US hospitals grew during a time period when an increasing number of hospitals were experiencing financial problems. Our study examines a six-year longitudinal database of general acute care hospitals in 11 states to assess the relationship between hospital financial condition and quality of care. We evaluate two measures of financial performance: operating margin and a broader profitability measure that encompasses both operating and non-operating sources of income. Our model specification allows for gradual adjustments in quality-enhancing activities and recognizes that current realizations of patient quality may affect future financial performance. Empirical results suggest that there is a relationship between financial performance and quality of care, but not as strong as suggested in earlier research. Overall, our results suggest that deep financial problems that go beyond the patient care side of business may be important to prompting quality problems.

Safety-Net Hospitals

Vulnerable populations, who have difficulty accessing the health care system, primarily receive their medical care from hospitals. Policy makers have struggled to ensure the survival of “safety-net hospitals,” hospitals that provide a disproportionate share of care to these patient populations. The objective of this article is to develop measures to guide analysis and policy for urban safety-net hospitals. The authors developed three safety-net measures: the socioeconomic status of hospital service area, Medicaid intensity, and uncompensated care burden and its market share. Cluster analysis was used to identify break points that distinguish a safety-net hospital from a non-safety-net hospital. The measures developed were stable and independent, but a data-driven binary assignment of hospitals to a “safety-net” category was not supported. These analyses call into question the empirical basis for distinguishing a specific group of hospitals as safety-net hospitals.

Trends in private insurance, Medicaid/State Children's Health Insurance Program, and the health-care safety net: implications for asthma disparities

Disparities in asthma prevalence, severity, quality of care, and outcomes have been widely documented across racial/ethnic communities, among privately insured vs publicly insured patients, and according to patients' socioeconomic status, among other patient characteristics. In order to effectively address asthma disparities, changes will need to be made across all systems of care in which these subpopulations receive health-care services. The majority of current trends in private insurance, Medicaid/State Children's Health Insurance Program, and the safety net are likely to further exacerbate asthma disparities rather than help to reduce these disparities. Asthma cannot be effectively managed unless individuals have affordable access to a full range of services and receive coordinated, quality health care. Multiple policy levers will need to be simultaneously employed to ensure access to the full range of services needed for effective asthma management, especially among low-income and minority persons with asthma in order to reduce the gap in disparities. The needs of these patients must be thoughtfully addressed and strategically advocated for within all systems of care in which these subpopulations receive health services. This overall strategy must necessarily include consideration of the capacity of safety-net providers to meet the needs of uninsured and underinsured persons with asthma. This article reviews trends in health-care financing, in clinical management, and the health-care safety net, and assesses their likely impact on asthma disparities. It concludes with a discussion of key policy arenas that will have significant influence on the eventual success of efforts to reduce asthma disparities.

How Federal and State Policies Affected Hospital Uncompensated Care Provision in the 1990s

The 1990s featured pronounced policy change that had important effects on safety net providers and their ability to care for the uninsured. The authors examined how changes in public policy affected hospital uncompensated care (UC) between 1990 and 2000. They found that aggregate state Medicaid Disproportionate Share Hospital spending had no impact on UC provision. Expanding public health insurance eligibility for children and adults and increasing Medicaid managed care had small negative effects on UC provision. State and local tax appropriations had the largest impact on UC provision. A better understanding of the effect of health care policies on UC provision is essential in crafting new policies and better anticipating their impact.

The effect of managed care on hospitals' provision of uncompensated care

This study examines the effect of managed care on hospitals' provision of uncompensated care, using a new measure of managed care that is hospital-specific, rather than measured for the area as a whole, and which includes payment by preferred provider organizations (PPOs) as well as by health maintenance organizations (HMOs). Based on data for Florida hospitals in the period 1998-2002, the results indicate that a higher percentage of private managed care patient-days was associated with a decrease in uncompensated care as a percentage of total operating expenses, holding net profit margin and other factors constant. The results suggest that spillover effects on uncompensated care should be taken into account when considering increases in managed care payment.

Safety-net activities and hospital contracting with managed care organizations

This article studies factors of safety-net hospitals that affect contracting with managed-care organizations. Web-based data were used to identify the hospital networks of managed-care plans in 71 metropolitan statistical areas. We collected lists of hospitals from a national sample of managed-care plans. After combining these data with hospital, managed-care, and area characteristics, multivariate logistic regressions with random effects were estimated to determine hospital characteristics that influence the probability of a contract between the plan and hospital. Hospital characteristics included size, ownership, whether it was part of a system, teaching status, and safety-net activities. Managed-care plan characteristics included type of plan and ownership. Certain safety-net hospital measures and a cluster of related hospital characteristics are associated with a lower probability of contract. Hospitals accounting for a disproportionate share of safety-net activities are less likely to belong to managed-care networks, which may place them at a competitive disadvantage.

Caring for the New Uninsured: Hospital Charity Care for Older People without Coverage

Despite near-universal coverage through Medicare, a number of elderly residents in the United States do not have health insurance coverage. To the author's knowledge, this study is the first to document trends in the use of hospital charity care by uninsured older people. Data from the New Jersey Charity Care Program, which subsidizes hospitals for services provided to low-income uninsured people, were used to analyze trends in charity care utilization by older people from 1999 to 2004. Charity care charges are standardized to uniform Medicaid reimbursement rates and inflation adjusted using the Medical Care Consumer Price Index. From 1999 to 2004, use of charity care by older people grew much faster than it did for younger patients. As a result, older people now account for a greater share of hospital charity care in New Jersey than children. Elderly users of charity care generated higher costs per patient than their younger counterparts. Cost differences were especially salient at the upper end of the distribution, where high-cost elderly patients used significantly more resources than high-cost patients in other age groups. These results highlight an emerging source of strain on the healthcare safety net and point to a growing population of uninsured residents who have costly and complex medical needs. Similar experiences are likely to be found in other states, especially those that have growing populations of elderly immigrants who are likely to lack health insurance.

The consumer welfare implications of the hospital ownership mix in the US: an exploratory study

This paper offers an empirical test concerning how hospital ownership mix affects consumer welfare in the US. The test compares the market benefits and costs resulting from an increased presence of nonprofit hospitals by observing empirically how the nonprofit market share impacts hospital care utilization at the margin. The empirical results suggest that too many not-for-profit and public hospitals exist in the inpatient care segment of the typical hospital services industry of the US. In contrast, the empirical findings indicate that too many for-profit hospitals operate in the outpatient care portion of the hospital services industry. The policy implication is that more quality of care per dollar might be obtained by promoting increased for-profit activity to inpatient care and more nonprofit activity to outpatient care in some market areas. This conclusion, however, is tempered with several caveats. We discuss these and also make recommendations for further research.

The influence of health policy and market factors on the hospital safety net

OBJECTIVE

To examine how the financial pressures resulting from the Balanced Budget Act (BBA) of 1997 interacted with private sector pressures to affect indigent care provision.

DATA SOURCES/STUDY SETTING

American Hospital Association Annual Survey, Area Resource File, InterStudy Health Maintenance Organization files, Current Population Survey, and Bureau of Primary Health Care data.

STUDY DESIGN

We distinguished core and voluntary safety net hospitals in our analysis. Core safety net hospitals provide a large share of uncompensated care in their markets and have large indigent care patient mix. Voluntary safety net hospitals provide substantial indigent care but less so than core hospitals. We examined the effect of financial pressure in the initial year of the 1997 BBA on uncompensated care for three hospital groups. Data for 1996-2000 were analyzed using approaches that control for hospital and market heterogeneity.

DATA COLLECTION/EXTRACTION METHODS

All urban U.S. general acute care hospitals with complete data for at least 2 years between 1996 and 2000, which totaled 1,693 institutions.

PRINCIPAL FINDINGS

Core safety net hospitals reduced their uncompensated care in response to Medicaid financial pressure. Voluntary safety net hospitals also responded in this way but only when faced with the combined forces of Medicaid and private sector payment pressures. Nonsafety net hospitals did not exhibit similar responses.

CONCLUSIONS

Our results are consistent with theories of hospital behavior when institutions face reductions in payment. They raise concern given continuing state budget crises plus the focus of recent federal deficit reduction legislation intended to cut Medicaid expenditures.

The effect of the availability of charity care to the uninsured on the demand for private health insurance

The economic reasons why some people do not obtain health insurance are unclear. In this paper, I test the hypothesis that the availability of charity care to the uninsured reduces the likelihood of obtaining private coverage. I utilize variation in the availability of charity care across the different markets in the Community Tracking Study's Household Survey (CTS-HS) using an "access to care" measure of the uninsured's cost-related difficulties in obtaining medical care, to both aggregate across the various "safety net" providers and control for its potentially endogenous supply. I find evidence supporting this hypothesis for low-income people, in both the individual market and the employment-based group market. I also estimate a joint model of offer and take-up decisions for the group market sample and find that the availability of charity care reduces low-income workers' offer rates but not their take-up rates.

Health care resource allocation and individuals' health care needs: examining the degree of fit

Previous studies examine associations between health system resources and an individual's use of health services, yet the importance of these resources in meeting an individual's health care needs is unclear. This paper examines the relationship between health care system characteristics, other social and economic characteristics of counties in a mid-western U.S. state and an individual's ability to meet health care needs over a 12-month period. We conclude that policy interventions are needed that look beyond health resource allocation to address problems in health care access that contribute to inequities in health.

The supply of uncompensated care in Pennsylvania hospitals: motives and financial consequences

The need for uncompensated care has increased during a period in which hospitals are confronted with public and private-sector fiscal pressures. Using a panel design (1995--1998) on Pennsylvania private, not-for-profit general hospitals, we found the provision of uncompensated care is positively associated with financial surpluses, the provision of uncompensated care by neighboring hospitals, bed capacity, proportion of outpatient visits that are emergency, and the unemployment rate (a proxy for need for uncompensated care). Other analysis found that the provision of uncompensated care was not associated with operating surplus, except in hospitals that provide very large amounts of uncompensated care. Provision of services to Medicaid patients and HMO penetration had a negative impact on profitability.

Medical debt and aggressive debt restitution practices: predatory billing among the urban poor

BACKGROUND

Health care providers are increasingly relying on collection agencies to recoup charges associated with medical care. Little is known about the prevalence of this practice in low-income communities and what effect it has on health-seeking behavior.

METHODS

Cross-sectional survey at 10 "safety net" provider sites in Baltimore, Md. Specific queries were made to underlying comorbidities, whether they had a current medical debt, actions taken against that debt, and any effect this has had on health-seeking behavior.

RESULTS

Overall, 274 adults were interviewed. The average age was 43.9 years, 77.3% were African American, 54.6% were male, 47.2% were homeless, and 34.4% had less than a 12th grade education. Of these, 46.2% reported they currently had a medical debt (average, 3,409 dollars) and 39.4% reported ever having been referred to a collection agency for a medical debt. Overall, 67.4% of individuals reported that either having a current medical debt or having been referred to a collection agency for a medical debt affected their seeking subsequent care: 24.5% no longer went to that site for care; 18.6% delayed seeking care when needed; and 10.4% reported only going to emergency departments now. In the multiple logistic regression model, having less than a 12th grade education (odds ration [OR], 2.5; 95% confidence interval [CI], 1.0 to 6.0) and being homeless (OR, 4.1; 95% CI, 1.4 to 12.3) were associated with a change in health-seeking behavior while having a chronic medical condition (OR, 0.2; 95% CI, 0.1 to 0.5) and going to a community clinic for usual care (OR, 0.2; 95% CI, 0.1 to 1.0) were protective.

CONCLUSIONS

Aggressive debt retrieval for medical care appears to be indiscriminately applied with a negative effect on subsequent health-seeking behavior among those least capable of navigating the health system.

Recent Trends and Geographic Variation in the Safety Net

BACKGROUND

Policymakers and researchers are concerned that changes in the healthcare market have stressed and weakened the safety net nationwide.

OBJECTIVES

The objectives of this study were to investigate variations in the safety net across communities and over time and to explore the effect of market changes on the safety net.

MATERIALS AND METHODS

We examined the safety net in all large urban communities from 1993 to 1998. Data from a variety of sources measure uncompensated hospital care, local government spending for health, admissions to safety net hospitals, visits to outpatient departments of safety net hospitals, visits to community health centers, and demographic and market characteristics of the communities. Descriptive analyses examine trends and community variations. Multivariate methods are used to estimate the effect of market structure and of economic factors on the safety net.

RESULTS

The safety net did not erode in urban areas over the study period. There was substantial variation across communities, but the disparity did not increase over time. HMO penetration and hospital competition are not significantly related to variations in the safety net, although demographic and economic factors are.

CONCLUSIONS

Local financing capacity is a factor in variations across communities in the safety net. The economic downturn and pressures on state budgets could lead to future problems.

Trends in hospital consolidation: the formation of local systems

During the past decade the hospital industry has made profound organizational changes, including the extensive consolidation of hospitals through merger and the formation of hospital systems. Although the rate of hospital system acquisitions may be slowing, the local presence of hospital systems is growing. Locally concentrated systems have been formed by both for-profit and nonprofit hospitals. Researchers have tended to ignore acquisitions or have portrayed system formation as primarily an issue of hospital ownership conversion, thereby focusing on the expansion of national, for-profit systems. This has left a large gap in policymakers' understanding of how locally concentrated systems may affect patient care and competition.

Hospital provision of uncompensated care and public program enrollment

Hospital provision of uncompensated care is partly a function of insurance coverage of state populations. As states expand insurance coverage options and reduce the number of uninsured, hospital provision of uncompensated care should also decrease. Controlling for hospital characteristics and market factors, the authors estimate that increases in MinnesotaCare (a state-subsidized health insurance program for the working poor) enrollment resulted in a 5-year cumulative savings of $58.6 million in hospital uncompensated care costs. Efforts to evaluate access expansions should take into account the costs of the program and the savings associated with reductions in hospital uncompensated care.

Managed care penetration, insurance status, and access to health care

BACKGROUND

Access to health care, reflected by an ability to meet one's health needs, is influenced by individual characteristics and the environment. Although managed care activity influences healthcare prices and overall utilization, its relationship to access and its broader effects across different insurance categories has not been well studied.

OBJECTIVE

To examine the association between managed care activity and individuals' access to care, and to assess differences in this relationship by insurance status.

RESEARCH DESIGN

Cross-sectional survey of households conducted in 1998.

SUBJECTS

A sample of 15,613 adult Ohio residents.

MEASURES

Self-reported difficulties in obtaining health care, medications, supplies, or medical equipment in the past year.

RESULTS

A total of 1248 (8.0%) identified an access problem. In bivariate analyses, these problems were more common among continuously and intermittently uninsured individuals compared with those who were continuously insured during the previous 12 months (P<0.001) and also among those living in areas with more managed care (P=0.01). After accounting for other individual and environmental characteristics in hierarchical analyses, individuals residing in areas with more managed care had 28% higher odds of reporting problems obtaining care than those elsewhere (multivariate odds ratio, 1.28; 95% confidence interval, 1.04-1.58]; P=0.02). No significant interaction between managed care penetration and insurance status was observed.

CONCLUSIONS

Greater managed care activity is associated with unfavorable patterns of healthcare access despite an individual's insurance status, suggesting more pervasive effects. Unintended effects should be carefully evaluated when formulating future programs that seek to address disparities in access to care.

Charity for the Dying: Who Receives Unreimbursed Hospice Care?

OBJECTIVES

Many deaths occur among persons without insurance coverage for hospice care. We examined the patient and agency characteristics associated with receiving unreimbursed hospice care in a national survey.

RESULTS

We examined the receipt of unreimbursed care using the 1998 National Home and Hospice Care Survey (NHHCS) discharge dataset. Overall, only 3% of hospice patients received unreimbursed care. Because 98% of older adults are eligible for Medicare, we stratified multivariate analysis on age greater or less than 65 years. Among persons less than 65 years of age, younger, nonwhite persons were more likely to receive unreimbursed care, as were persons with cancer. Agencies providing unreimbursed care to persons over the age of 65 years were more likely to be not-for-profit and freestanding.

CONCLUSION

Recipients of unreimbursed hospice care are demographically similar to the uninsured, and whether uninsured persons receive unreimbursed hospice care depends on clinical and agency organizational factors related to the motivation to provide unreimbursed care.

Hospitals' care of uninsured patients during the 1990s: the relation of teaching status and managed care to changes in market share and market concentration

Competitive forces in health care make it difficult for hospitals to shift the costs of caring for poor and uninsured patients onto paying patients. The care of uninsured patients in teaching hospitals may have been especially affected by increased levels of managed care during the 1990s. We found that the market share of uninsured patients during the 1990s grew at academic health center hospitals relative to other hospitals in their service areas, and these increases occurred primarily in areas with high levels of managed care. More generally, in urban areas, the care of uninsured patients was twice as concentrated as that of all patients, and the ratio of concentration (uninsured patients vs. all patients) was greater in areas with high managed care levels than in areas with low managed care levels (p < .01). These results have implications for the design of payment policies for indigent care.

Declining payments for emergency department care, 1996-1998

STUDY OBJECTIVE

We describe recent trends in payments from different payer classes and assess their relative importance to the financial solvency of emergency departments.

METHODS

We used Medical Expenditure Panel Survey data from 1996 and 1998. The unit of analysis was the ED visit. Primary outcome measures were ED charges and payments. The independent variable of interest was payer class, and therefore, we limited our analysis to those either uninsured or covered by Medicare, Medicaid, or private insurance.

RESULTS

From 1996 to 1998, a declining percentage of total charges were paid, from 60.3% to 53.0% (difference -7.3%; 95% confidence interval [CI] -11.3% to -3.5%). Although the percentage of total charges paid by Medicaid, Medicare, and the uninsured remained constant, the percentage of total charges paid by the privately insured declined from 75.1% to 63.4% (difference -11.7%; 95% CI -16.6% to -6.7%). Overall, adjusted mean ED charge increased from 695 dollars to 798 dollars (difference 103 dollars; 95% CI 61 dollars to 146 dollars). Two payer classes experienced statistically significant increases in adjusted mean charge: the uninsured, from 544 dollars to 740 dollars (difference 196 dollars; 95% CI 62 dollars to 330 dollars), and the privately insured, from 658 dollars to 813 dollars (difference 151 dollars; 95% CI 103 dollars to 199 dollars). Although the adjusted mean payment rate for the uninsured remained stable, the adjusted mean payment rate for the privately insured declined from 77.7% to 65.7% (difference -12.0%; 95% CI -13.4% to -10.7%).

CONCLUSION

The ability of EDs to provide emergency care to all regardless of ability to pay is increasingly threatened by declining overall payment rates. Cost shifting to fund care for the uninsured is an increasingly untenable financing strategy.

Toward estimating the impact of changes in immigrants' insurance eligibility on hospital expenditures for uncompensated care

BACKGROUND

The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 gave states the option to withdraw Medicaid coverage of nonemergency care from most legal immigrants. Our goal was to assess the effect of PRWORA on hospital uncompensated care in the United States.

METHODS

We collected the following state-level data for the period from 1994 through 1999: foreign-born, noncitizen population and health uninsurance rates (US Census Current Population Survey); percentage of teaching hospitals (American Hospital Association Annual Survey of Hospitals); and each state's decision whether to implement the PRWORA Medicaid bar for legal permanent residents or to continue offering nonemergency Medicaid coverage using state-only funds (Urban Institute). We modeled uncompensated care expenditures by state (also from the Annual Survey of Hospitals) in both univariate and multivariable regression analyses.

RESULTS

When measured at the state level, there was no significant relationship between uncompensated care expenditures and states' percentage of noncitizen immigrants. Uninsurance rates were the only significant factor in predicting uncompensated hospital care expenditures by state.

CONCLUSIONS

Reducing the number of uninsured patients would most surely reduce hospital expenditures for uncompensated care. However, data limitations hampered our efforts to obtain a monetary estimate of hospitals' financial losses due specifically to the immigrant eligibility changes in PRWORA. Quantifying the impact of these provisions on hospitals will require better data sources.

Medicare financing of graduate medical education

The past decade has seen ongoing debate regarding federal support of graduate medical education, with numerous proposals for reform. Several critical problems with the current mechanism are evident on reviewing graduate medical education (GME) funding issues from the perspectives of key stakeholders. These problems include the following: substantial interinstitutional and interspecialty variations in per-resident payment amounts; teaching costs that have not been recalibrated since 1983; no consistent control by physician educators over direct medical education (DME) funds; and institutional DME payments unrelated to actual expenditures for resident education or to program outcomes. None of the current GME reform proposals adequately address all of these issues. Accordingly, we recommend several fundamental changes in Medicare GME support. We propose a re-analysis of the true direct costs of resident training (with appropriate adjustment for local market factors) to rectify the myriad problems with per-resident payments. We propose that Medicare DME funds go to the physician organization providing resident instruction, keeping DME payments separate from the operating revenues of teaching hospitals. To ensure financial accountability, we propose that institutions must maintain budgets and report expenditures for each GME program. To establish educational accountability, Residency Review Committees should establish objective, annually measurable standards for GME program performance; programs that consistently fail to meet these minimum standards should lose discretion over GME funds. These reforms will solve several long-standing, vexing problems in Medicare GME funding, but will also uncover the extent of undersupport of GME by most other health care payers. Ultimately, successful reform of GME financing will require "all-payer" support.

America's Health Care Safety Net: intact or unraveling?

In virtually every community in this nation, the emergency department (ED) is an integral part of the health care safety net, often serving as the only available point of access to the health care system for many vulnerable and disenfranchised individuals. The authors present a brief overview of the March 2000 report released by the Institute of Medicine that described and assessed the current status of the nation's health care safety net. The authors discuss the role of the ED as a safety net provider and as a window onto the status of the rest of the health care system. The authors describe the Andersen behavioral model of health services use and suggest it as a useful theoretical framework for emergency medicine researchers who are interested in studying these issues.

"I can't afford that!": dilemmas in the care of the uninsured and underinsured

When patients lack sufficient health care insurance, financial matters become integrally intertwined with biomedical considerations in the process of clinical decision making. With a growing medically indigent population, clinicians may be compelled to bend billing or reimbursement rules, lower standards, or turn patients away when they cannot afford the costs of care. This article focuses on 3 types of dilemmas that clinicians face when patients cannot pay for needed medical services: (1) whether to refer the individual to a safety net provider, such as a public clinic; (2) whether to forgo indicated tests and therapies because of cost; and (3) whether to reduce fees by fee waivers or other adjustments in billing. Clinicians' responses to these dilemmas impact on quality of care, continuity, safety net providers, and the liability risk of committing billing violations or offering nonstandard care. Caring for the underinsured in the current health care climate requires an understanding of billing regulations, a commitment to informed consent, and a beneficent approach to finding individualized solutions to each patient care/financial dilemma. To effect change, however, physicians must address issues of social justice outside of the office through political and social activism.

The impact of HMOs on hospital-based uncompensated care

Managed care in general and HMOs in particular have become the vehicle of choice for controlling health care spending in the private sector. By several accounts, managed care has achieved its cost-containment objectives. At the same time, the percentage of Americans without health insurance coverage continues to rise. For-profit and not-for-profit hospitals have traditionally financed care for the uninsured from profits derived from patients with insurance. Thus the relationship between growth in managed care and HMOs, hospital "profits," and care for the uninsured represent an important policy question. Using national data over an eight-year period, we find that a ten-percentage point increase in managed care penetration is associated with a two-percentage point reduction in hospital total profit margin and a 0.6 percentage point decrease in uncompensated care.

Variation in therapy and outcome for pediatric head trauma patients

OBJECTIVE

This study was undertaken to examine variation in therapies and outcome for pediatric head trauma patients by patient characteristics and by pediatric intensive care unit. Specifically, the study was designed to examine severity of illness on admission to the pediatric intensive care unit, the therapies used during the pediatric intensive care unit stay, and patient outcomes.

DATA SOURCES AND SETTING

Consecutive admissions from three pediatric intensive care units were recorded prospectively (n = 5,749). For this study, all patients with an admitting diagnosis of head trauma were included (n = 477). Data collection occurred during an 18-month period beginning in June 1996. All of the pediatric intensive care units were located in children's hospitals, had residency and fellowship training programs, and were headed by a pediatric intensivist.

METHODS

Admission severity was measured as the worst recorded physiological derangement during the period <or=6 hrs before pediatric intensive care unit admission. Therapies and resource use were based on the Therapeutic Intervention Scoring System with adaptations for pediatrics. The use of intracranial pressure monitoring was recorded on admission to the unit (within 1 hr) and at any time during the pediatric intensive care unit stay. Outcomes were measured at the time of pediatric intensive care unit discharge by the Pediatric Overall Performance Category scale. Risk factors for mortality were examined by using bivariate analyses with significant predictors as candidate variables in a logistic regression to predict expected mortality. Intracranial pressure monitoring and other therapies were added to the mortality prediction model to test for protective effects. Finally, race and insurance status were added to the model to test for differences in the quality of care.

RESULTS

The overall mortality rate for the entire sample was 7.8%. Mortality rates for children <or=1 yr old were significantly higher than for children >1 yr old (16.1% vs. 6.1%; p = .002). Comparisons by insurance status indicated that observed mortality rates were highest for self-paying patients. However, patient characteristics were not associated with use of therapies or standardized mortality rates after adjustment for patient severity. There was significant variation in the use of paralytic agents, seizure medications, induced hypothermia, and intracranial pressure monitoring on admission across the three pediatric intensive care units. In multivariate models, only the use of seizure medications was associated significantly with reduced mortality risk (odds ratio = 0.17; 95% confidence interval = 0.04-0.70; p = .014).

CONCLUSIONS

Therapies and outcomes vary across pediatric intensive care units that care for children with head injuries. Increased use of seizure medications may be warranted based on data from this observational study. Large randomized controlled trials of seizure prophylaxis in children with head injury have not been conducted and are needed to confirm the findings presented here.

Mass screening in low-income populations: the challenges of securing diagnostic and treatment services in a national cancer screening program

Funding for many mass screening programs for low-income and uninsured populations provides resources for screening tests, yet only rarely does it provide coverage for necessary follow-up diagnostic and treatment services. The National Breast and Cervical Cancer Early Detection Program (NBCCEDP), a federally funded initiative that provides cancer screening to low-income uninsured and underinsured women, covers some diagnostic follow-up tests and no treatment services. We conducted in-depth case studies of seven state programs participating in the NBCCEDP to investigate the strategies and approaches being used to secure diagnostic and treatment services. The results suggest that the program relies on a patchwork of resources--at state and local levels--to provide diagnostic and treatment services. This includes a number of components of local safety nets, all of which are unstable and have uncertain futures. Public health disease-screening initiatives need to reconsider the feasibility of continued reliance on case-by-case appeals to the local safety net for diagnostic follow-up and treatment services.

Income levels of bad-debt and free-care patients in Massachusetts hospitals

This study disputes the common notion that many hospitalized patients whose expenses are written off to bad debt are able to pay their bills. By matching 1996 state tax returns to more than 350,000 bad-debt and free-care claims at seven Massachusetts hospitals, we found that most patients involved had incomes below the federal poverty level and thus were presumably eligible for either public programs or hospital-based free care. This suggests that hospitals and public officials need to investigate further why low-income, uninsured patients are not receiving benefits for which they are eligible. Our results also suggest that measurements of indigent care levels in hospitals for purposes of research or regulation should include some portion of bad debt.