Utilization trends before and after PPS

This article compares utilization trends for inpatient care before and after the introduction of Medicare's Prospective Payment System (PPS). Using discharges from a constant cohort of 419 hospitals over an eight-year period, I examine Medicare and non-Medicare utilization trends for the variables: total discharges, average length of stay (ALOS), average preoperative length of stay, average postoperative length of stay, percentage of patients using either ICU or CCU, and percentage of patients with consultations. Admission declines and the initial drop in ALOS are consistent with the initial program objectives and expectations. Post-PPS increases in ALOS, especially postoperative ALOS, are not consistent with PPS goals. Use of consultants and ICU/CCU facilities is not different before and after PPS.