US nursing-home population composition in the PPS-era

This paper uses the 1987 National Medical Expenditure Survey-Institutional Population Component baseline public use data to compare US nursing-home population residents who were admitted in years adjacent to the 1982 Tax Equity and Fiscal Responsibility Act (TEFRA). This Act has been associated with claims of hospitals discharging Medicare patients quicker and sicker in order to gain financially under the prospective payment system (PPS), which would change the composition of nursing-home populations. The working hypothesis was that if PPS had an effect on the composition of nursing-home populations, those admitted during the PPS-era would have more reported deficits than those who were admitted in the pre-PPS period. Although the data are cross-sectional it was expected that differences in trends could be observed. The data do not show any general change in the composition of nursing-home populations that could be attributed to PPS. The explanation is that while PPS may have a discernible effect on short stayers, there have not been any clear effects to date on the long-stayer population represented by these data.