Hospitals serving Black patients get less financial help, study shows

Hospitals serving a higher proportion of Black patients receive less financial support for providing care compared with those serving a lower proportion, according to a recent study from physician-researchers at the University of California Los Angeles and Princeton, Johns Hopkins and Harvard universities

The peer-reviewed study compiled data from Medicare and the American Hospital Association on 5,740 hospitals from 2016 to 2018. Of those hospitals, 574 were defined as “Black-serving,” or those in the top 10% for the highest share of Black patients among Medicare inpatients. Most of the Black-serving hospitals were concentrated in Southern and/or urban environments.

Total reimbursements, which includes payments from patients and insurers for patient care per day were an average of 21.6% lower at the Black-serving hospitals, researchers found. The hospitals serving more Black patients averaged a loss of $17 per patient each day, compared with an average profit of $126 per patient day among the study’s other hospitals.

Mean profits were $111 lower per patient day at Black-serving hospitals, once adjusted for the variety in cases and facilities.

Much of the disparity is related to reimbursement rates and often leads to lower standards of care at hospitals with fewer resources, said Dr. Gracie Himmelstein, study author and an internal medicine resident at UCLA. Medicaid discharges accounted for 14.2% of discharges at Black-serving hospitals, compared with 9.5% at the other facilities, according to the study. Medicaid, in general, reimburses providers at a lower rate than Medicare or private agencies.

Medicaid reimbursements have been a contentious issue for years, with states battling over whether to accept the financial hit of expanded coverage. The COVID-19 pandemic has further highlighted the disparities created in government-funded coverage options.

“These differences in reimbursement rates from different insurances are not created in a vacuum, and the sort of racial dynamics of these programs are well-known,” Himmelstein said. “What we’re seeing here is this disparate impact.”

She sees the disparity play out in her day-to-day work. Himmelstein, who also works at a private facility, attributes the different standards of care to different reimbursement rates and limited resources.

Himmelstein said the same trends are likely happening among other minority populations, although the Medicaid data is not as comprehensive for those demographics.