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J Health Econ. 2008 Jul;27(4):1046-59. doi: 10.1016/j.jhealeco.2008.01.003. Epub 2008 Mar 10.

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

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  • 1RAND & NBER, USA. sood@rand.org

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.

PMID:
18423657
DOI:
10.1016/j.jhealeco.2008.01.003
[PubMed - indexed for MEDLINE]
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