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Can amputation save the hospital? The impact of the Medicare Rural Flexibility Program on demand and welfare

Gautam Gowrisankaran, Claudio Lucarelli, Philipp Schmidt-Dengler and Robert Town

Journal of Health Economics, 2018, vol. 58, issue C, 110-122

Abstract: This paper seeks to understand the impact of the Medicare Rural Hospital Flexibility (Flex) Program on hospital choice and consumer welfare for rural residents. The Flex Program created a new class of hospital, the Critical Access Hospital (CAH), which receives more generous Medicare reimbursements in return for limits on capacity and length of stay. We find that conversion to CAH status resulted in a 4.7 percent drop in inpatient admissions to participating hospitals, almost all of which was driven by factors other than capacity constraints. The Flex Program increased consumer welfare if it prevented the exit of at least 6.5 percent of randomly selected converting hospitals.

Keywords: Hospital choice; Patient welfare; Medicare (search for similar items in EconPapers)
JEL-codes: L11 L38 I11 I18 (search for similar items in EconPapers)
Date: 2018
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Related works:
Working Paper: Can Amputation Save the Hospital? The Impact of the Medicare Rural Flexibility Program on Demand and Welfare (2013) Downloads
Working Paper: Can Amputation Save the Hospital? The Impact of the Medicare Rural Flexibility Program on Demand and Welfare (2013) Downloads
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