Rural Hospital Wages and the Area Wage Index

We examined data on hospital hourly wages and the prospective payment system (PPS) wage index from 1990 to 1997, to determine if incremental changes to the index have improved its precision and equity as a regional cost adjuster. The differential between average rural and urban PPS hourly wages has declined by almost one-fourth over the 8-year study period. Nearly one-half of the decrease is attributable to regulatory and reporting changes in the annual hospital wage survey. Patterns of within-market wage variation across rural-urban continuum codes identify three separate sub-markets within the State-level aggregates defining rural labor markets. Geographic reclassification decisions appear to eliminate one of the three. Remaining systematic within-market rural wage differences work to the reimbursement advantage of hospitals in the smaller and more isolated communities

Potential Effects of Managed Competition in Rural Areas

This article assesses the extent to which managed competition could be successful in rural areas. Using 1990 Medicare hospital patient origin data, over 8 million rural residents were found to live in areas potentially without provider choice. Almost all of these areas were served by providers who compete for other segments of their market. Restricting use of out-of-State providers would severely limit opportunities for choice. These findings suggest that most residents of rural States would receive cost benefits from a managed competition system if purchasing alliances are carefully defined, but consideration should be given to boundary issues when forming alliances

Developing Financial Benchmarks for Critical Access Hospitals

This study developed and applied benchmarks for five indicators included in the CAH Financial Indicators Report, an annual, hospital-specific report distributed to all critical access hospitals (CAHs). An online survey of Chief Executive Officers and Chief Financial Officers was used to establish benchmarks. Indicator values for 2004, 2005, and 2006 were calculated for 421 CAHs and hospital performance was compared to the benchmarks. Although many hospitals performed better than benchmark on one indicator in 1 year, very few performed better than benchmark on all five indicators in all 3 years. The probability of performing better than benchmark differed among peer groups

Emergency Medical Services (EMS) Activities Funded by the Medicare Rural Hospital Flexibility Program

Since the first full year of Flex Program funding, the number and range of EMS improvement activities proposed by participating facilities has increased substantially. This report describes the EMS-related projects that states proposed to conduct in fiscal year 2004-2005

A Resident-Based Reimbursement System for Intermediate Care Facilities for the Mentally Retarded

In this article, the authors present a resident-based reimbursement system for intermediate care facilities for the mentally retarded (ICFs-MR), which represent a large and growing proportion of the Medicaid budget. The statistical relationship between resident disability level and the expected cost of caring for the individual is estimated, allowing for the prediction of expected resource use across the population of ICF-MR residents. The system incorporates an indirect cost rate, a base direct care rate (constant across all providers), and an individual-specific direct care rate, based on the expected cost of care

Rural and Urban Differences in Children's Medicaid and CHIP Participation

Efforts to increase enrollment in Medicaid and the Children's Health Insurance Program (CHIP) among uninsured children would benefit from an understanding of how program participation varies in rural and urban areas. Using Current Population Survey data from the period 2006–2007, rural participation rates were slightly higher than urban rates in the nation overall. There was no rural-urban difference when comparisons were based on within-state variation, independent of adjustment for individual characteristics. For researchers examining health policy issues strongly influenced by state policies or other state-level factors, this study highlights the challenges presented by national data sets with small or nonexistent samples from geographic areas within some states

Comparative Performance Data for Critical Access Hospitals

CONTEXT: Among small rural hospitals, there is a growing recognition of the need to measure and report on the use of resources and the safety and quality of the services provided. Dashboards, clinical value compasses, and balanced scorecards are approaches to performance measurement that have been adopted by many health care organizations. However, there exists very little comparative performance data specific for critical access hospitals. PURPOSE: To identify how comparative performance data for critical access hospitals (CPD-CAH) might facilitate performance and quality improvement, to assess the potential benefits and drawbacks of such data, and to identify some of the critical issues in the development and implementation of CPD-CAH. METHODS: Assessment of discussions by participants at a rural hospital performance improvement summit and authors\u27 analyses. FINDINGS: CPD-CAH potentially could improve quality of care and patient outcomes, provide comparative data and benchmarks, inform policy development, facilitate collaboration, and enhance community relations. However, CPD-CAH could also impose an unaffordable cost, produce poor information, require complex coordination, induce a negative public reaction, and result in perverse hospital behavior. Development and implementation of CPD-CAH would require including stakeholders\u27 assessment of its desirability and feasibility, setting objectives, establishing guiding principles, developing a method, collecting and analyzing data, and disseminating results. CONCLUSIONS: CPD-CAH could significantly advance CAH performance and quality improvement. However, development and implementation would be a complicated exercise requiring academic expertise and practitioner consultation. The potential value of CPD-CAH should be carefully weighed against its potential cost