This study used 1982-1986 data on 262 private community hospitals to evaluate the effects of selective contracting for inpatient services by California's Medicaid program. Selective contracting by Medicaid significantly reduced the rate of inflation in average costs per admission and per patient day, while slightly increasing average lengths of patient stays. Private sector contracting also reduced cost inflation rates significantly and caused small, non-significant, reductions in lengths of stays. Hospital savings in 1986 due to Medicaid selective contracting were $836 million, 7.6% of what hospital expenditures would have been in the absence of contracting.

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Introduction: Patients who require invasive mechanical ventilation (IMV) often represent a sequence of care between the emergency department (ED) and intensive care unit (ICU). Despite being the most populous state, little information exists to define patterns of IMV use within the state of California.

Methods: We examined data from the masked Patient Discharge Database of California’s Office of Statewide Health Planning and Development from 2000-2009. Adult patients who received IMV during their stay were identified using the International Classification of Diseases 9th Revision and Clinical Modification procedure codes (96.70, 96.71, 96.72). Patients were divided into age strata (18-34yr, 35-64yr, and >65yr). Using descriptive statistics and regression analyses, for IMV discharges during the study period, we quantified the number of ED vs. non-ED based admissions; changes in patient characteristics and clinical outcome; evaluated the marginal costs for IMV; determined predictors for prolonged acute mechanical ventilation (PAMV, i.e. IMV>96hr); and projected the number of IMV discharges and ED-based admissions by year 2020.

Results: There were 696,634 IMV discharges available for analysis. From 2000–2009, IMV discharges increased by 2.8%/year: n=60,933 (293/100,000 persons) in 2000 to n=79,868 (328/100,000 persons) in 2009. While ED-based admissions grew by 3.8%/year, non-ED-based admissions remained stable (0%). During 2000-2009, fastest growth was noted for 1) the 35–64 year age strata; 2) Hispanics; 3) patients with non-Medicare public insurance; and 4) patients requiring PAMV. Average total patient cost-adjusted charges per hospital discharge increased by 29% from 2000 (from $42,528 to $60,215 in 2014 dollars) along with increases in the number of patients discharged to home and skilled nursing facilities. Higher marginal costs were noted for younger patients (ages 18-34yr), non-whites, and publicly insured patients. Some of the strongest predictors for PAMV were age 35-64 years (OR=1.12; 95% CI [1.09-1.14], p<0.05); non-Whites; and non-Medicare public insurance. Our models suggest that by 2020, IMV discharges will grow to n=153,153 (377 IMV discharges/100,000 persons) with 99,095 admitted through the ED.

Conclusion: Based on sustained growth over the past decade, by the year 2020, we project a further increase to 153,153 IMV discharges with 99,095 admitted through the ED. Given limited ICU bed capacities, ongoing increases in the number and type of IMV patients have the potential to adversely affect California EDs that often admit patients to ICUs.