Impact of PPS (Prospective Payment System) on Medicare Part B Expenditures and Utilization Associated with Hospital Admissions

摘要

The study analyzed the impact of Medicare's hospital prospective payment system (PPS) on Medicare physician expenditures and utilization associated with hospital admissions. In addition to the admission itself, the study also looks at expenditures and utilization during the seven days before and after the hospital stay. Two types of analyses are presented: a detailed description of time trends of Part B expenditures and utilization associated with hospital admissions, and a multivariate analysis in which factors other than PPS which affect expenditures and utilization are held constant in order to isolate the impacts of PPS. The study is based on merged Part A and Part B claims for 1983-1986 for four States: Alabama, Connecticut, Washington, and Wisconsin. The study focused on eleven groups of diagnosis related groups. Multivariate findings suggest that PPS has generally reduced hospital episode expenditures between 10% and 20% per year and reduced lengths of stay over 15% per year relative to what they would have been without the PPS program.