In Minnesota, several health care cost containment measures occurred about the time Medicare's Prospective Payment System (PPS) was implemented. These included a moratorium on additional nursing home beds, preadmission screening of nursing home applicants, and rapid growth in HMO (health maintenance organization) enrollment by Medicare recipients. Hospital days per elderly Medicaid recipient decreased by 38 percent for those in nursing homes and by 35 percent for those not in nursing homes from 1982 to 1984. By 1986, hospital days per recipient had decreased 53 and 55 percent, respectively, from the 1982 level. Age-adjusted mortality rates for elderly Medicaid nursing home residents for the period 1977 through 1986 showed an increasing trend after 1982. Estimated age-adjusted mortality rates for the entire County population, which had decreased steadily from 1970 to 1982, rose significantly above the projected rate in 1984, 1985, 1986, and 1987. We conclude that, coincident with the institution of the PPS and other health care cost containment measures, use of hospital care has fallen for all elderly Medicaid recipients, age-adjusted mortality rates among those in nursing homes have increased, and the mortality rate trend for the total Hennepin County elderly population has stopped declining.
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