Purpose: Compare Medicare beneficiaries admitted to public, private not-for-profit, and for-profit psychiatric hospitals. Methods: Administrative data on all beneficiaries admitted to psychiatric hospitals in 1990 were used to estimate multinomial logit models of treatment in for-profit or private not-for-profit (vs. public) hospitals, controlling for patient characteristics. Results: Women and beneficiaries with worse geographic access to public hospitals, better access to private hospitals, or comorbidities were more likely to be treated in private hospitals. Blacks, rural residents, and beneficiaries who were disabled, had previous psychiatric hospitalizations, or a primary diagnosis of schizophrenia were less likely to be treated in private hospitals. Residents of lower-income areas were less likely to be treated in private not-for-profits. Conclusions: In addition to being essential providers for the uninsured, public hospitals also play an important role in ensuring access to care for Medicare beneficiaries. Public psychiatric hospitals treat a disproportionate share of the sickest, lowest-income, and minority patients. Geographic proximity and bed supply also play an important role in provider choices. Plans to privatize state psychiatric facilities should take these considerations into account.
Psychiatric hospitals Medicare public sector privatization mental health services