Medicare's Prospective Payment System for Hospitals: New Evidence on Transitions Among Health Care Settings
Previous studies of Medicare’s prospective payment system for hospitals (PPS), introduced in 1983, evaluated only its first few years, using data collected during the hospital stay to control for patients’ health. We examine transitions among health care settings over a full decade following implementation of PPS, using survival models and a national longitudinal survey with independent information on health. We find that the rate of discharge from hospitals to nursing homes continued to rise as PPS matured, hospital readmissions from the community dropped after the early years, and risk of nursing home admission from the community soon after hospital discharge tripled. Evaluations of new payment systems for one type of provider need to be comprehensive in order to capture the full effects on other providers.
|Date of creation:||09 Oct 2007|
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- 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.
- Cutler, David M, 1995.
"The Incidence of Adverse Medical Outcomes under Prospective Payment,"
Econometric Society, vol. 63(1), pages 29-50, January.
- Cutler, D.M., 1992. "The Incidence of Adverse Medical Outcome Under Prospective Payment," Harvard Institute of Economic Research Working Papers 1603, Harvard - Institute of Economic Research.
- David M. Cutler, 1993. "The Incidence of Adverse Medical Outcomes Under Prospective Payments," NBER Working Papers 4300, National Bureau of Economic Research, Inc.
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