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

Xufeng Qian (), Louise Russell (), Elmira Valiyeva () and Jane Miller ()
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Xufeng Qian: Moody's
Elmira Valiyeva: Rutgers
Jane Miller: Rutgers/Bloustein School and Institute for Health

Departmental Working Papers from Rutgers University, Department of Economics

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.

Keywords: Medicare (search for similar items in EconPapers)
JEL-codes: C41 I18 (search for similar items in EconPapers)
Date: 2005-07-19
New Economics Papers: this item is included in nep-hea
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Handle: RePEc:rut:rutres:200506