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Utilization and case-mix impacts of per case payment in Maryland
Abstract:
Maryland has simultaneously operated per case and per service hospital payment systems since 1976 with varying levels of stringency in setting per case rates. Regression analyses of this experience are used to compare the impacts of these systems on admissions, length of stay, and case-mix costliness from July 1, 1976 to June 30, 1981. Our results indicate a positive effect on admissions and negative effects on case mix and length of stay for the per case payment approach relative to the per service approach. More stringent levels of per case payment are associated with stronger utilization responses.
Insights
Maryland
Area of Science:
- Health economics
- Hospital payment systems analysis
- Healthcare policy research
Background:
- Maryland has utilized both per case and per service hospital payment systems since 1976.
- The stringency of per case rates has varied over time.
- Understanding the impact of these systems is crucial for healthcare management.
Purpose of the Study:
- To compare the effects of per case versus per service payment systems on hospital utilization.
- To analyze the impact on admissions, length of stay, and case-mix costliness.
- To assess the relationship between payment system stringency and utilization responses.
Main Methods:
- Regression analyses were employed to compare the two payment systems.
- Data spanned from July 1, 1976, to June 30, 1981.
- Key performance indicators analyzed included admissions, length of stay, and case-mix costliness.
Main Results:
- The per case payment approach showed a positive effect on hospital admissions.
- Conversely, per case payments were associated with negative effects on case mix and length of stay.
- Increased stringency in per case payment rates correlated with stronger utilization responses.
Conclusions:
- The per case hospital payment system significantly influences utilization patterns compared to the per service system.
- Payment system design and rate stringency are key determinants of hospital admissions and efficiency.
- Findings provide insights for optimizing hospital reimbursement strategies.
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