The Impact of Medicare's Prospective Payment System on Psychiatric Patients Treated in Scatterbeds

Medicare's Prospective Payment System (PPS) for hospitals was phased-in during the 1884 Federal Fiscal Year. While many providers of psychiatric inpatient care were exempted from PPS patients treated in general hospital beds outside of psychiatric units (scatterbeds) were not. This allows for an initial assessment of the impact of PPS on psychiatric patients. We use a single equation model of hospital length of stay to estimate the impact of PPS. We allow for the possibility of both anticipating behavior and slow adjustment to the new payment scheme. The results indicate a substantial response to PPS over the first year of implementation. The estimated response includes sizable anticipatory and slow adjustment components. The findings suggest that policy discussions may be weighted too heavily in the direction of concern over hospital financial status given the ability of hospitals to change their behavior.

Technical and allocative efficiency in production of outpatient mental health clinic services

This paper presents an analysis of production of ambulatory mental health services in free standing outpatient clinics. The study empirically addresses several issues including: the nature of returns to scale, the impact of differing organizational forms on the volume of service produced and the efficiency of staffing patterns used by psychiatric clinics. An appraisal of two popular production functions is offered based on predictive performance. The results suggest the existence of decreasing retirns to scale; input hiring decisions that depart from cost minimization; and the potential important of a decentralized clinic organization for expansion of access to mental health services.production function allocative efficiency staffing

Veterans with mental disorders, 1963-1967.

"Prepared by the Survey and Reports Section, Biometry Branch, Office of Program Planning and Evaluation, NIMH. The text was written by Carl A. Taube."Chiefly tables.Mode of access: Internet

Mental Health, Human Capital and Labor Market Outcomes

There are two primary treatment alternatives available to those with mild to moderate depression or anxiety: psychotherapy and medication. The medical literature and our analysis suggests that in many cases psychotherapy, or a combination of therapy and medication, is more curative than medication alone. However, few individuals choose to use psychotherapy. We develop and estimate a dynamic model in which individuals make sequential medical treatment and labor supply decisions while jointly managing mental health and human capital. The results shed light on the relative importance of several drawbacks to psychotherapy that explain patients' reluctance to use it: (1) therapy has high time costs, which vary with an individual's opportunity cost of time and flexibility of the work schedule; (2) therapy is less standardized than medication, which results in uncertainty about its productivity for a given individual; and (3) therapy is expensive. The estimated model is used to simulate the impacts of counterfactual policies that alter the costs associated with psychotherapy