The Effect of Uncompensated Care Costs on Hospital Contributions to Population Health Improvement Activities
The Affordable Care Act (ACA), along with Medicaid expansion, was expected to reduce the rising burden on hospitals from uncompensated care provision to uninsured people while creating new resources and incentives for hospitals to contribute to disease prevention and health promotion activities. By examining the association between area-level hospital uncompensated care provision and hospital contributions to public health activities for the period 2006-2016, our analysis lends empirical evidence to the hypothesis from the extant literature that reducing uncompensated care costs might enable hospitals to re-allocate resources for population health improvement. Hospital participation in public health activities increased from 41% in 2006 to 47% in 2016 with hospitals most likely to contribute to assessment and policy related core public health functions. In 2014 constant dollar terms, relevant area-level uncompensated care costs were estimated to decline from 126 dollars per capita in 2006 to around 103 dollars per capita in 2016. Results from the multivariate model indicate that a one percent increase in the total cost of area-level hospital uncompensated care is associated with a 9 percentage point decrease in hospital contributions to public health activities (p<0.05). Our findings suggest that hospital contributions to population health activities increase as uncompensated care provision declines, consistent with a substitution effect.
- Cezar B. Mamaril, PhD
- Glen P. Mays, PhD
- John D. Poe, PhD
Longitudinal observations from the NLSPHS on hospital contributions to core public health activities in the community was linked to contemporaneous data on uncompensated care provision from Medicare Hospital Cost Reports; Hospital Service Area (HSA) information from the Dartmouth Atlas of Health Care; public health agency data from the NACCHO National Profile of Local Health Departments Survey; and community characteristics from the HRSA Area Health Resource File. To create an area-level measure of hospital uncompensated care provision, agency-level NLSPHS data was linked with HSA-aggregated uncompensated care costs using a crosswalk of the zip codes contained in each public health agency service area and in each HSA. A multivariate regression model with instrumental-variables (IV) was used to estimate changes in hospital contributions to population health activities attributable to changes in area-level hospital uncompensated care costs, while controlling for measured confounders and unmeasured heterogeneity.