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Has PPS increased Medicare expenditures on physicians?

J Holahan1, A Dor, S Zuckerman

  • 1Urban Institute.

Journal of Health Politics, Policy and Law
|January 1, 1991
PubMed
Summary
This summary is machine-generated.

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Medicare's Prospective Payment System (PPS) minimally impacted physician spending. While hospital costs decreased, physician services saw a slight increase due to shifts in service delivery and rising elderly incomes.

Area of Science:

  • Health Economics
  • Medicare Policy
  • Physician Services Analysis

Background:

  • Medicare's Prospective Payment System (PPS) significantly reduced hospital spending.
  • The study period (1983-1985) saw changes in healthcare utilization and elderly demographics.

Purpose of the Study:

  • To determine if Medicare's PPS caused an increase in physician service expenditures.
  • To analyze the impact of assignment rates and elderly income on physician spending.

Main Methods:

  • Analysis of Medicare physician service volume data from 1983 and 1985.
  • Statistical examination of factors influencing real expenditures for physician services.

Main Results:

  • The Prospective Payment System (PPS) had a minimal positive effect on real physician expenditures.

Related Experiment Videos

  • A decline in hospitalizations led to decreased Medicare physician spending, partially offset by service shifts.
  • Increased Medicare assignment rates and rising elderly incomes contributed to observed spending growth.

    • Conclusions:

    • Medicare's PPS did not substantially increase overall physician expenditures.
    • Shifts in service delivery from hospitals to outpatient settings partially offset PPS-induced savings.
    • Rising elderly incomes and higher Medicare assignment rates were significant drivers of physician spending growth during this period.