Several previous studies of hospital utilization by nonelderly rural residents suggest that local rural hospitals have been increasingly bypassed, often for care in urban hospitals. This resulted in lost volume for rural hospitals, detracting from their financial viability. It is not clear to what extent elderly rural residents also bypass local hospitals and whether this reflects regionalization of treatment for some conditions or avoidance of local hospitals assumed to provide inadequate care. This study examines hospital use by aged rural Delaware Medicare beneficiaries living in a ZIP code area that has a local hospital during Fiscal Year (FY) 1987 (N = 670). Most of these Medicare beneficiaries were hospitalized locally. Those beneficiaries who bypassed local rural hospitals usually did so because cardiovascular surgical procedures were required and were often only performed in large urban teaching hospitals. Beneficiaries using nonlocal hospitals were similar to users of local hospitals with respect to age and sex and traveled an average of nearly 42 miles for treatment. "Bypassing" here appears to be due primarily to regional specialization of care rather than abandonment of local rural hospitals by rural residents.
This report examines the use of rural and urban hospitals by rural Medicare beneficiaries. Many rural Medicare beneficiaries are treated in urban hospitals, primarily for specialized care that is not available locally. This study examines Medicare inpatient hospital discharge data for rural beneficiaries from fiscal year 1990 to fiscal year 1998. Utilization patterns by diagnosis-related group (DRG) are examined for fiscal year (FY) 1997. The percentage of rural beneficiaries treated in urban hospitals ranged from 30 percent to 36 percent during the study period. For the most frequently occurring DRGs among rural beneficiaries, which were those for routine conditions, treatment occurred predominantly in rural hospitals. The conditions most often responsible for rural beneficiaries' use of urban hospitals during this period reflected the need for coronary and other specialized surgical care. The stability of volume and case-mix throughout the study period underscores the viability of rural hospitals during a period of substantial change in the organization of health care provision.
Cranial surgery in the Medicare population results in high inpatient mortality and high rates of postacute care use, especially as patient age increases.
The cost of inpatient transfer cases has concerned hospitals as well as rate-setters. Reform of transfer payment in Medicare's Prospective Payment System has been suggested to ensure access and adequate treatment for these cases in a period where inpatient revenue has been declining. This analysis indicates that both transfer cases received and cases transferred to other hospitals have above average costs per case but their impact on Medicare inpatient cost per discharge is smaller than that of variables such as case-mix, area wages and resident/bed ratio which are used directly in PPS payment. Evidence is provided indicating the desirability of reform of PPS payment methods for transfer cases.
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