Do Medicare and Medicaid Payer-Mix Change After the Privatization of Public Hospitals?

This study assessed the impact of public hospitals' privatization on payer-mix. We used a national sample of nonfederal, acute care, public hospitals in 1997 and followed them through 2013, resulting in a cohort of 492 hospitals (8,335 hospital-year observations). Privatization to for-profit (FP) status was associated with a greater increase in Medicare payer-mix (β = 0.13; ≤ .001), compared with a smaller increase for privatization to not-for-profit (NFP) status (β = 0.02; ≤ .05). FP privatization was associated with a greater decrease in Medicaid payer-mix (β = -0.09; ≤ .001), compared with NFP privatization (nonsignificant). There is a larger change in payer-mix after FP privatization than after NFP privatization.