What affects rural beneficiaries use of urban and rural hospitals?

Analysis of the Medicare provider analysis record (MEDPAR) data during fiscal years 1984 through 1989 indicates that the proportion of rural Medicare beneficiaries hospitalized in urban hospitals has remained constant during the prospective payment system (PPS). Much of the use of urban hospitals by rural beneficiaries during this period was to obtain specialized care or surgery, as suggested by the analysis, and is consistent with historical patterns of referral of rural patients. Thus, the bypassing of rural hospitals by rural beneficiaries for treatment in urban hospitals has probably not increased during PPS.