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Related Experiment Videos

Case shifting and the Medicare Prospective Payment System.

F A Sloan1, M A Morrisey, J Valvona

  • 1Department of Health Care Organization and Policy, School of Public Health, University of Alabama, Birmingham 35294.

American Journal of Public Health
|May 1, 1988
PubMed
Summary

The Medicare Prospective Payment System (PPS) saw stable Medicare discharges but an increase in uninsured patients. Hospital case mix complexity and severity rose, with more Medicare patients using emergency rooms.

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Area of Science:

  • Health Services Research
  • Healthcare Policy
  • Hospital Administration

Background:

  • The Medicare Prospective Payment System (PPS) was implemented in 1984 to control healthcare costs.
  • Understanding the initial impacts of PPS on hospital operations and patient demographics is crucial for policy evaluation.

Purpose of the Study:

  • To assess the effects of the Medicare Prospective Payment System (PPS) during its initial two years (1984-85) on hospital operations and patient characteristics.
  • To analyze changes in discharge rates, patient mix, case severity, and emergency room utilization post-PPS implementation.

Main Methods:

  • Utilized data from the Commission on Professional and Hospital Activities and the American Hospital Association for 467 hospitals.
  • Compared hospital data from 1983-1985 to evaluate trends before and after PPS implementation.

Related Experiment Videos

  • Analyzed Medicare discharges as a percentage of total discharges, uninsured patient rates, discharge volumes, diagnosis-related group (DRG) complexity, and emergency room admission patterns.
  • Main Results:

    • Medicare discharges as a percentage of total discharges remained constant, but the proportion of uninsured patients increased, particularly in large public hospitals.
    • Both Medicare and total hospital discharges per facility declined.
    • An increase in complex diagnosis-related groups (DRGs) and case mix severity was observed, a trend that predated PPS but continued afterward. Medicare emergency room admissions rose, while non-Medicare admissions remained stable.

    Conclusions:

    • While PPS implementation coincided with shifts in patient demographics and utilization, some trends like increasing case mix complexity began before its introduction.
    • The rise in uninsured and Medicare emergency room admissions warrants continued monitoring for potential PPS influence.
    • The study highlights the complex interplay of factors affecting hospitals during the early stages of PPS adoption.