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.

The Effect of Pulmonary Artery Catheter Use on Costs and Long-Term Outcomes of Acute Lung Injury

Background: The pulmonary artery catheter (PAC) remains widely used in acute lung injury (ALI) despite known complications and little evidence of improved short-term mortality. Concurrent with NHLBI ARDS Clinical Trials Network Fluid and Catheters Treatment Trial (FACTT), we conducted a prospectively-defined comparison of healthcare costs and long-term outcomes for care with a PAC vs. central venous catheter (CVC). We explored if use of the PAC in ALI is justified by a beneficial cost-effectiveness profile. Methods: We obtained detailed bills for the initial hospitalization. We interviewed survivors using the Health Utilities Index Mark 2 questionnaire at 2, 6, 9 and 12 m to determine quality of life (QOL) and post-discharge resource use. Outcomes beyond 12 m were estimated from federal databases. Incremental costs and outcomes were generated using MonteCarlo simulation. Results: Of 1001 subjects enrolled in FACTT, 774 (86%) were eligible for long-term follow-up and 655 (85%) consented. Hospital costs were similar for the PAC and CVC groups ($96.8k vs.$89.2k, p = 0.38). Post-discharge to 12 m costs were higher for PAC subjects ($61.1k vs. 45.4k, p = 0.03). One-year mortality and QOL among survivors were similar in PAC and CVC groups (mortality: 35.6$14.4k and mean loss of 0.3 quality-adjusted life years (QALYs)) and a 94.2% probability of being higher than the $100k/QALY willingness-to-pay threshold. Conclusion: PAC use increased costs with no patient benefit and thus appears unjustified for routine use in ALI. Trial Registration: www.clinicaltrials.gov NCT00234767. © 2011 Clermont et al

Does managed care make a difference? Physicians' length of stay decisions under managed and non-managed care

BACKGROUND: In this study we examined the influence of type of insurance and the influence of managed care in particular, on the length of stay decisions physicians make and on variation in medical practice. METHODS: We studied lengths of stay for comparable patients who are insured under managed or non-managed care plans. Seven Diagnosis Related Groups were chosen, two medical (COPD and CHF), one surgical (hip replacement) and four obstetrical (hysterectomy with and without complications and Cesarean section with and without complications). The 1999, 2000 and 2001 – data from hospitals in New York State were used and analyzed with multilevel analysis. RESULTS: Average length of stay does not differ between managed and non-managed care patients. Less variation was found for managed care patients. In both groups, the variation was smaller for DRGs that are easy to standardize than for other DRGs. CONCLUSION: Type of insurance does not affect length of stay. An explanation might be that hospitals have a general policy concerning length of stay, independent of the type of insurance of the patient