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Prospective payment based on case mix: will it work in nursing homes?

M D Rosko1, R W Broyles, W E Aaronson

  • 1Widener University.

Journal of Health Politics, Policy and Law
|January 1, 1987
PubMed
Summary

This study suggests nursing homes should use functional health status, not diagnosis, for prospective payment systems. This approach aims to improve quality and access in long-term care.

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Area of Science:

  • Health Services Research
  • Healthcare Economics
  • Gerontology

Background:

  • The nursing home industry faces challenges in aligning payment with care needs.
  • Existing payment models may not adequately reflect the complexity of long-term care.
  • Differences between hospital and nursing home structures necessitate tailored reimbursement strategies.

Purpose of the Study:

  • To evaluate the efficacy of prospective payment systems (PPS) for nursing homes based on case mix.
  • To explore alternative patient classification systems for PPS in long-term care.
  • To identify policy considerations for nursing home reimbursement.

Main Methods:

  • Comparative analysis of nursing home and hospital industry structures.
  • Assessment of proposed patient classification systems for PPS.
  • Review of policy implications for payment units and regulatory authority.

Main Results:

  • Functional health status is a more appropriate basis for nursing home reimbursement than diagnosis.
  • Current industry structures suggest a need for revised compensation mechanisms.
  • Incentives for enhancing quality and access in long-term care require strengthening.

Conclusions:

  • Prospective payment systems in nursing homes should prioritize functional health status.
  • Policy discussions must address the appropriate unit of payment and regulatory scope.
  • Reimbursement reform is crucial for improving long-term care quality and access.

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