Objective. To examine data on Medicaid and self-pay/charity maternity cases
to address four questions: (1) Did safety-net hospitals' share of Medicaid
patients decline while their shares of self-pay/charity-care patients incr
eased from 1991 to 1994? (2) Did Medicaid patients' propensity to use safet
y-net hospitals decline during 1991-94? (3) Did self-pay/charity patients'
propensity to use safety-net hospitals increase during 1991-94? (4) Did the
change in Medicaid patients' use of safety-net hospitals differ for low- a
nd high-risk patients?
Study Design. We use hospital discharge data to estimate logistic regressio
n models of hospital choice for low-risk and high-risk Medicaid and self-pa
y/charity maternity patients for 25 metropolitan statistical areas (MSAs) i
n five states for the years 1991 and 1994. We define low-risk patients as d
ischarges without comorbidities and high-risk patients as discharges with c
omorbidities that may substantially increase hospital costs, length of stay
, or morbidity. The five states are California, Florida, Massachusetts, New
Jersey, and New York. The MSAs in the analysis are those with at least one
safety-net hospital and a population of 500,000 or more. This study also u
ses data from the 1990 Census and AHA Annual Survey of Hospitals. The regre
ssion analysis estimates the change between 1991 and 1994 in the relative o
dds of a Medicaid or self-pay/charity patient using a safety-net hospital.
We explore whether this change in the relative odds is related to the risk
status of the patient.
Principal Findings. The findings suggest that competition for Medicaid pati
ents increased from 1991 to 1994. Over time, safety-net hospitals lost low-
risk maternity Medicaid patients while services to high-risk maternity Medi
caid patients and self-pay/charity maternity patients remained concentrated
in safety-net hospitals.
Implications for Policy. Safety-net hospitals use Medicaid patient revenues
and public subsidies that are based on Medicaid patient volumes to subsidi
ze care for uninsured and underinsured patients. If safety-net hospitals co
ntinue to lose their low-risk Medicaid patients, their ability to finance c
are for the medically indigent will be impaired. Increased hospital competi
tion may improve access to hospital care for low-risk Medicaid patients, bu
t policymakers should be cognizant of the potential reduction in access to
hospital care for uninsured and underinsured patients. Public policymakers
should ensure that safety-net hospitals have sufficient financial resources
to care for these patients by subsidizing their care directly.