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New Evidence on Medicare's Prospective Payment System: A Survival Analysis based on the NHANES I Epidemiologic Followup Study

Author

Listed:
  • Xufeng Qian

    (Moody's)

  • Louise Russell

    (Rutgers/Economics and Institute for Health)

  • Elmira Valiyeva

    (Rutgers)

  • Jane Miller

    (Rutgers/Bloustein School and Institute for Health)

Abstract

Medicare’s prospective payment system (PPS), introduced in 1983, pays hospitals a fixed price for each stay rather than reimbursing costs. Previous studies evaluated its first few years using endogenous measures to control for heterogeneity in patients’ health. We examine PPS over a full decade using competing risks Cox survival models and a national longitudinal survey with independent information on patients’ health. New findings include: risk of death in hospital increased; risk of discharge to a nursing home continued to increase as PPS matured; and risk of nursing home admission from the community following hospital discharge rose. HMOs may have contributed to these outcomes.

Suggested Citation

  • Xufeng Qian & Louise Russell & Elmira Valiyeva & Jane Miller, 2005. "New Evidence on Medicare's Prospective Payment System: A Survival Analysis based on the NHANES I Epidemiologic Followup Study," Departmental Working Papers 200506, Rutgers University, Department of Economics.
    • Handle: RePEc:rut:rutres:200506
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    File URL: http://www.sas.rutgers.edu/virtual/snde/wp/2005-06.pdf
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    References listed on IDEAS

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    4. Feigenbaum, Susan & Anderson, Gerard & Lave, Judith R, 1992. "Medicare's Prospective Payment System: The Victim of Aggregation Bias?," The Review of Economics and Statistics, MIT Press, vol. 74(1), pages 185-191, February.
    5. Shen, Yu-Chu, 2003. "The effect of financial pressure on the quality of care in hospitals," Journal of Health Economics, Elsevier, vol. 22(2), pages 243-269, March.
    6. Nazmi Sari, 2002. "Do competition and managed care improve quality?," Health Economics, John Wiley & Sons, Ltd., vol. 11(7), pages 571-584, October.
    7. Russell, L.B. & Carson, J.L. & Taylor, W.C. & Milan, E. & Dey, A. & Jagannathan, R., 1998. "Modeling all-cause mortality: Projections of the impact of smoking cessation based on the NHEFS," American Journal of Public Health, American Public Health Association, vol. 88(4), pages 630-636.
    8. Newhouse, Joseph P. & Byrne, Daniel J., 1988. "Did Medicare's Prospective Payment System cause length of stay to fall?," Journal of Health Economics, Elsevier, vol. 7(4), pages 413-416, December.
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    Cited by:

    1. Afsaneh Bjorvatn, 2013. "Hospital readmission among elderly patients," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 14(5), pages 809-820, October.

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    More about this item

    Keywords

    Medicare;

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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