Does how much and how you pay matter? Evidence from the inpatient rehabilitation care prospective payment system

Neeraj Sood; Melinda Beeuwkes Buntin; José J Escarce

doi:10.1016/j.jhealeco.2008.01.003

Does how much and how you pay matter? Evidence from the inpatient rehabilitation care prospective payment system

J Health Econ. 2008 Jul;27(4):1046-1059. doi: 10.1016/j.jhealeco.2008.01.003. Epub 2008 Mar 10.

Authors

Neeraj Sood¹, Melinda Beeuwkes Buntin², José J Escarce³

Affiliations

¹ RAND & NBER, USA.
² RAND Corporation Health, 1200 South Hayes Street, Arlington, VA 22202, USA.
³ RAND, UCLA School of Medicine & NBER, USA.

PMID: 18423657
DOI: 10.1016/j.jhealeco.2008.01.003

Abstract

We use the implementation of a new prospective payment system (PPS) for inpatient rehabilitation facilities (IRFs) to investigate the effect of changes in marginal and average reimbursement on costs. The results show that the IRF PPS led to a significant decline in costs and length of stay. Changes in marginal reimbursement associated with the move from a cost-based system to a PPS led to a 7-11% reduction in costs. The elasticity of costs with respect to average reimbursement ranged from 0.26 to 0.34. Finally, the IRF PPS had little or no impact on mortality or the rate of return to community residence.

Publication types

Research Support, Non-U.S. Gov't

MeSH terms

Evidence-Based Medicine*
Inpatients*
Prospective Payment System*
Rehabilitation Centers / economics*
Rehabilitation Centers / statistics & numerical data*
United States