Investigation into subsidies for hospitals that provide a disproportionate share (DSH) of care to uninsured patients in California found that DSH subsidies do not effectively target the highest providers of care to the uninsured.
The authors of this study examined whether DSH subsidies in California actually reach hospitals that serve uninsured patients and whether receipt of DSH subsidies leads to lower prices for the uninsured. They researched California acute care private hospitals that report financial data to the state and used data covering 2001-2006. They defined relative price for uninsured patients as percent difference of uninsured payments from Medicaid payments for each hospital.
These findings support financing health care reform efforts to cover the uninsured by redirecting some federal DSH funding. However, this study may not apply to other states because of different state laws about Medicaid eligibility and DSH subsidy distribution.