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

No 18894, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: I11 I18 L11 L38 (search for similar items in EconPapers)
Date: 2013-03
Note: EH IO
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Published as Gautam Gowrisankaran & Claudio Lucarelli & Philipp Schmidt-Dengler & Robert Town, 2018. "Can Amputation Save the Hospital? The Impact of the Medicare Rural Flexibility Program on Demand and Welfare," Journal of Health Economics, .

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Related works:
Journal Article: Can amputation save the hospital? The impact of the Medicare Rural Flexibility Program on demand and welfare (2018)
Working Paper: Can Amputation Save the Hospital? The Impact of the Medicare Rural Flexibility Program on Demand and Welfare (2013)
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