Hospital utilization and mortality levels for patients in the Arizona health care cost containment system

The primary intent behind Medicaid was to mainstream the poor and enable them to receive the same level and quality of care enjoyed by the middle class. This study compares the hospital utilization (total charges, length of stay, charges per day) and mortality levels among beneficiaries of Arizona's experimental Medicaid program with those of privately insured patients. The analysis is based on 121,874 discharges of patients with 11 different conditions from nonfederal general hospitals in Arizona during 1989 and 1990. After controlling for severity of illness and the specific hospital used, as well as several patient, hospital, and physician factors, we find that AHCCCS patients with medical, surgical, and pediatric diagnoses exhibit few significant differences in utilization and mortality compared to patients with private insurance. However, AHCCCS patients undergoing vaginal delivery exhibit significantly lower charges and length of stay, suggesting they underuse these services. AHCCCS women undergoing cesarean section exhibit higher charges and longer stays. We conclude that Arizona's Medicaid program provides hospital care equivalent to that received by privately-insured patients for many but not all conditions.