Reductions in Medicare and Medicaid Affects Care of the Uninsured

    • September 1, 1998

During 1994 and 1995, researchers at the Western Consortium for Public Health explored the impact of reductions in Medicare and Medicaid spending on the levels of uncompensated care that hospitals provide to the medically indigent.

The research team analyzed data from a national database that they had constructed, which integrated hospital-specific information on operations and performance with market-level information on managed care penetration, demographics and state regulatory structure.

Key Findings

  • The amount of uncompensated care delivered by hospitals grew from $6.1 billion in 1983 to $17.5 billion in 1995.

  • More than one-third of uncompensated care is delivered by large urban public teaching hospitals; 60 percent is delivered by private hospitals.

  • Higher levels of managed care penetration are associated with lower levels of uncompensated care.

  • Hospitals that serve a large share of Medicaid patients increased their share of uncompensated care from 46 percent of all uncompensated care in 1983 to 56 percent in 1995.

  • Those hospitals that traditionally have relied on Medicaid revenue would be affected more adversely by decreases in hospital payments and utilization associated with the entry of HMOs into the Medicaid market.