The Experiences of Massachusetts Hospitals as Statewide Health Insurance Reform Was Implemented

Hospitals treat many uninsured patients and shoulder substantial amounts of uncompensated care. Health reform as implemented in Massachusetts, then, would be expected to bode well for hospitals as many people obtain coverage from private and public programs. We examined changes in Massachusetts hospital payer mix, unreimbursed costs of care for the uninsured and those in means-tested public programs, and overall financial condition for the period 2004 to 2010. Despite increases in coverage, unreimbursed costs for the uninsured and those in means-tested government programs did not decrease appreciably for Massachusetts hospitals over the study period. Major safety-net hospitals, which play a substantial role in serving the uninsured and Medicaid, had some initial easing of this burden but their financial situation weakened through 2010. The U.S. economic recession and Massachusetts budget pressures, which in part resulted from reform implementation, likely offset advantages hospitals experienced from reductions in the uninsured. Our analysis suggests that state actions in Massachusetts to change payment programs that the two major safety net hospitals relied on to support indigent care contributed to their financial difficulties.