Medicaid shortfalls and total unreimbursed hospital care for the poor, 1980-1989.

This article examines the relationship between Medicaid payments and hospital costs from 1980 through 1989, using data from the American Hospital Association's Annual Survey of Hospitals. It finds that payments covered about 90% of Medicaid hospital costs until 1985, then declined to 78% in 1989. Together, Medicaid shortfalls ($4.2 billion) and unsponsored care ($8.9 billion) accounted for $13.1 billion in unreimbursed hospital costs in 1989. Most of the recent growth in unreimbursed hospital cost incurred in care for the poor is now caused by rising Medicaid shortfalls rather than increases in unsponsored care. While Medicaid shortfalls accounted for about one-fifth of unreimbursed care for the poor in 1980, they accounted for a third in 1989.