NBER Working Papers by Melinda B. Buntin

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 to 11% reduction in costs. The elasticity of costs with respect average reimbursement ranged from 0.26 to 0.34. Finally, the IRF PPS had little or no impact on costs in other sites of care, mortality, or the rate of return to community residence.

To assess the relative impact of clinical factors versus non-clinical factors such as post acute care (PAC) supply - in determining whether patients receive care from skilled nursing facilities (SNFs) or inpatient rehabilitation facilities (IRFs) after discharge from acute care. Medicare acute hospital, IRF and SNF claims provided data on PAC choices; predictors of site of PAC chosen were generated from Medicare claims, provider of services, enrollment file, and Area Resource File data. We used multinomial logit models to predict post-acute care use by elderly patients after hospitalizations for stroke, hip fractures, or lower extremity joint replacements. A file was constructed linking Medicare acute and post-acute utilization data for all sample patients hospitalized in 1999. PAC...