Geographic variations in Medicare utilization of short-stay hospital services, 1981-88

The change in Federal fiscal year 1984 from cost-based reimbursement to prospective payment at a fixed price for a known and defined product--the hospital stay--represents a fundamental change in the role of the Medicare program within the health care delivery system. In this article, national and selected geographic trends in Medicare short-stay hospital inpatient discharges since 1981 are presented, and they show the impact of the implementation of the prospective payment system.