ImportanceResidential segregation has been shown to be a root cause of racial inequities in health outcomes, yet little is known about current patterns of racial segregation in where patients receive hospital care or whether hospital segregation is associated with health outcomes. Filling this knowledge gap is critical to implementing policies that improve racial equity in health care.ObjectiveTo characterize contemporary patterns of racial segregation in hospital care delivery, identify market-level correlates, and determine the association between hospital segregation and health outcomes.Design, Setting, and ParticipantsThis cross-sectional study of US hospital referral regions (HRRs) used 2018 Medicare claims, American Community Survey, and Agency for Healthcare Research and Quality Social Determinants of Health data. Hospitalization patterns for all non-Hispanic Black or non-Hispanic White Medicare fee-for-service beneficiaries with at least 1 inpatient hospitalization in an eligible hospital were evaluated for hospital segregation and associated health outcomes at the HRR level. The data analysis was performed between August 10, 2022, and September 6, 2023.ExposuresDissimilarity index and isolation index for HRRs.Main Outcomes and MeasuresHealth outcomes were measured using Prevention Quality Indicator (PQI) acute and chronic composites per 100 000 Medicare beneficiaries, and total deaths related to heart disease and stroke per 100 000 residents were calculated for individuals aged 74 years or younger. Correlation coefficients were used to compare residential and hospital dissimilarity and residential and hospital isolation. Linear regression was used to examine the association between hospital segregation and health outcomes.ResultsThis study included 280 HRRs containing data for 4386 short-term acute care and critical access hospitals. Black and White patients tended to receive care at different hospitals, with a mean (SD) dissimilarity index of 23 (11) and mean (SD) isolation index of 13 (13), indicating substantial variation in segregation across HRRs. Hospital segregation was correlated with residential segregation (correlation coefficients, 0.58 and 0.90 for dissimilarity and isolation, respectively). For Black patients, a 1-SD increase in the hospital isolation index was associated with 204 (95% CI, 154-254) more acute PQI hospitalizations per 100 000 Medicare beneficiaries (28% increase from the median), 684 (95% CI, 488-880) more chronic PQI hospitalizations per 100 000 Medicare beneficiaries (15% increase), and 6 (95% CI, 2-9) additional deaths per 100 000 residents (6% increase) compared with 68 (95% CI, 24-113; 6% increase), 202 (95% CI, 131-274; 8% increase), and 2 (95% CI, 0 to 4; 3% increase), respectively, for White patients.Conclusions and RelevanceThis cross-sectional study found that higher segregation of hospital care was associated with poorer health outcomes for both Black and White Medicare beneficiaries, with significantly greater negative health outcomes for Black populations, supporting racial segregation as a root cause of health disparities. Policymakers and clinical leaders could address this important public health issue through payment reform efforts and expansion of health insurance coverage, in addition to supporting upstream efforts to reduce racial segregation in hospital care and residential settings.