According to a recent study by medical researchers at UCLA and Princeton, Johns Hopkins and Harvard Universities, hospitals that serve a large proportion of black patients receive less financial support for care compared to hospitals that serve a smaller proportion.
The peer-reviewed study collected data from Medicare and the American Hospital Association on 5,740 hospitals from 2016 to 2018. Of these hospitals, 574 were identified as “serving blacks” or in the top 10% for the largest proportion of black patients. among Medicare inpatients. Most of the hospitals serving blacks were concentrated in the southern and/or urban areas.
The researchers found that total reimbursement, which includes payments from patients and insurers for patient care per day, was on average 21.6% lower at hospitals serving blacks. Hospitals serving more black patients lost $17 per patient per day on average, compared with an average profit of $126 per patient per day among other study hospitals.
Median profits at black hospitals were $111 lower per patient per day, adjusted for a variety of cases and conditions.
Much of the discrepancy has to do with reimbursement rates and often results in lower standards of care in under-resourced hospitals, said Dr. Gracie Himmelstein, study author and UCLA resident Dr. Gracie Himmelstein. According to the study, Medicaid discharge accounted for 14.2% of discharges at hospitals serving blacks, compared with 9.5% at other facilities. Medicaid generally reimburses providers at a lower rate than Medicare or private agencies.
Medicaid reimbursement has been a contentious issue for years, with states battling to take the financial hit from expanded coverage. The COVID-19 pandemic has further highlighted the inconsistencies that have arisen in publicly funded coverage options.
“These differences in reimbursement rates from different insurance companies do not just happen, and the sort of racial dynamics of these programs is well known,” Himmelstein said. “What we’re seeing here is a piecemeal impact.”
She sees how inequality manifests itself in her daily work. Himmelstein, who also works for a private institution, attributes different standards of care to different reimbursement rates and limited resources.
Himmelstein said the same trends are likely happening among other minorities, though the Medicaid data is not as complete for those demographics.