Context: Safety-net hospitals (ie, those that predominantly treat poor and underserved patients) often have lower quality of care than non-safety-net hospitals. While public reporting and pay for performance have the potential to improve quality of care at poorly performing hospitals, safety-net hospitals may be unable to invest in quality improvement. As such, some have expressed concern that these incentives have the potential to worsen existing disparities among hospitals.
Objective: To examine trends in disparities of quality of care between hospitals with high and low percentages of Medicaid patients.
Design and setting: Longitudinal study of the relationship between hospital performance and percentage Medicaid coverage from 2004 to 2006, using publicly available data on hospital performance. A simulation model was used to estimate payments at hospitals with high and low percentages of Medicaid patients.
Main outcome measures: Changes in hospital performance between 2004 and 2006, estimating whether disparities in hospital quality between hospitals with high and low percentages of Medicaid patients have changed.
Results: Of the 4464 participating hospitals, 3665 (82%) were included in the final analysis. Hospitals with high percentages of Medicaid patients had worse performance in 2004 and had significantly smaller improvement over time than those with low percentages of Medicaid patients. Hospitals with low percentages of Medicaid patients improved composite acute myocardial infarction performance by 3.8 percentage points vs 2.3 percentage points for those with high percentages, an absolute difference of 1.5 (P = .03). This resulted in a relative difference in performance gains of 39%. Larger performance gains at hospitals with low percentages of Medicaid patients were also seen for heart failure (difference of 1.4 percentage points, P = 0.04) and pneumonia (difference of 1.3 percentage points, P <.001). Over time, hospitals with high percentages of Medicaid patients had a lower probability of achieving high-performance status. In a simulation model, these hospitals were more likely to incur financial penalties due to low performance and were less likely to receive bonuses.
Conclusions: Safety-net hospitals tended to have smaller gains in quality performance measures over 3 years and were less likely to be high-performing over time than non-safety-net hospitals. An incentive system based on these measures has the potential to increase disparities among hospitals.