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Did Medicare's prospective payment system cause length of stay to fall?
Abstract:
It is well accepted that the Medicare Payment System caused average length of stay in United States hospitals to fall, but these calculations have been based on patients in short-stay, acute care hospitals. If one considers all patients covered by Medicare, length of stay rose between 1981 and 1984, although the 1985 value was below the 1981 value. The proximate cause was a marked increase in the proportion of patients staying more than 60 days in the hospital. The data are consistent with a shift of such patients from short-stay, acute care hospitals to other, exempt hospitals and units.
Insights
The Medicare Payment System did not lower all hospital lengths of stay. Longer stays increased for Medicare patients, suggesting a shift to exempt hospital units.
Area of Science:
- Health Economics
- Hospital Administration
- Public Health Policy
Background:
- The Medicare Payment System (MPS) is widely believed to have reduced average hospital length of stay (LOS).
- Previous analyses focused on short-stay, acute care hospitals, potentially overlooking broader trends.
- Understanding Medicare patient LOS is crucial for healthcare resource allocation and policy evaluation.
Purpose of the Study:
- To examine the impact of the Medicare Payment System on the length of stay for all Medicare beneficiaries, not just those in short-stay hospitals.
- To identify trends in Medicare patient length of stay between 1981 and 1985.
- To investigate the reasons behind observed changes in Medicare patient length of stay.
Main Methods:
- Analysis of Medicare patient data from 1981 to 1985.
- Comparison of length of stay trends across different hospital types.
- Identification of patient cohorts with extended hospital stays.
Main Results:
- While average LOS in short-stay hospitals decreased, overall Medicare patient LOS rose between 1981 and 1984.
- A significant increase in the proportion of Medicare patients with stays exceeding 60 days was observed.
- The 1985 overall LOS for Medicare patients fell below the 1981 level.
Conclusions:
- The Medicare Payment System's effect on LOS is complex and varies by hospital type.
- A notable shift of long-stay Medicare patients from acute care to exempt facilities occurred.
- Policy implications suggest a need to consider diverse care settings when evaluating payment system impacts.