Cost containment and competition have given rise to increasing concerns that individuals without insurance and unable to pay will have reduced access to hospital services and that those institutions which grant services to them will suffer financially. In a bid to eliminate the incentives for hospitals to avoid caring for the uninsured, in 1985 Massachusetts passed Chapter 574 establishing a hospital risk pool. The pool had the effect of equalizing payments across hospitals for bad debt and free care by obligating the entire industry to mark up its charges by a state- wide average level. The bill was designed to eliminate the incentive for individual hospitals to avoid caring for the uninsured. Similar concepts have emerged in a number of other states as policy options for paying hospitals. Yet to date there has been little evaluation of the effect of the pools on initial access to hospital care or on the use of services provided to uninsured versus insured patients once hospitalized.
Our research aim i s to examine over 200,000 hospital discharge records for Fiscal Years 1084 and 1987. The years before and after passage of Chap. 574, to study the effects of the Massachusetts uncompensated care pool on access to hospital care by uninsured patients. We will compare insured patients with uninsured patients in terms of total days of hospital care per capital rates of hospital admissions per capital and lengths of stay and use of procedures per discharge. For per capita utilization we will calculate age-sex adjusted rates. For analysis of length of stay and procedure use. We will specify multiple regression equations with sophisticated controls for case mix and severity within Diagnosis Related Groups (DRGs). We will emphasize differences in our findings between discretionary and non discretionary (i.e., necessary) care. As a concurrent control, we will examine similar trends in Maryland, a rate setting state which maintained a stable regulatory structure during the study period without introducing a risk pool. Our findings will have implications for other states contemplating the use of hospital risk pools to encourage access to hospital care for the uninsured.
