Do Frail, Disabled, Poor, and Very Old Medicare Beneficiaries Have Higher Hospital Charges?

Abstract

To determine whether basing payments on diagnosis related groups (DRGs) results in mispayment for certain classes of patients, we examined the relation between total Medicare charges per hospitalization and eight beneficiary characteristics (including admission from a nursing home, extreme age, Medicaid enrollment, and disability). We controlled for the hospital in which care was given and the DRG to which the discharge was assigned. The largest effects were that average charges were 6.7% higher for beneficiaries who were disabled before the age of 65 years, and 6.2% higher for patients admitted from a nursing home; charges were 1.5% lower for Medicare beneficiaries who were also enrolled in Medicaid, 3.8% higher for those older than 80 years, and 1.3% lower for those older than 85 years compared with those aged from 80 to 84 years. Because these differences are very small compared with the average variation within DRGs, we conclude that using these beneficiary characteristics in the DRG classification system would only slightly improve DRGs. Medicare's DRG-based payments seem to be substantially equitable with regard to these beneficiary characteristics.

Hospital Length of Stay of Frail Elderly Patients: Primary Care by General Internists versus Geriatricians

“…Thus, it is not clear, based on actual costs vs DRG reimbursement, at what level of length of stay the frail elderly patients actually do become revenue losers as compared to younger, less complex Medicare patients. The recently reported study of Jencks and Kay 23 would suggest that hospital charges for patients within a given DRG do not vary nearly as much with age as does length of stay. Also a cause for concern is the very long length of stay related to patients admitted from home who were discharged to nursing homes.…”

“…Because of these long stays, patients and physicians caring for a disproportionate number of patients requiring posthospital nursing home care could be veiwed by hospitals as relatively undesirable. Furthermore, a previously cited study 23 showed that patients discharged to nursing homes tended to have higher hospital charges within a DRG, most especially for medical DRGs.…”

A Resource-Intensive Medicare Patient Effect of Profit Margin on Care

“…Demand on the medical system increases with age; therefore, since approximately 84 percent of all nursing home residents are 75 Downloaded by [Nanyang Technological University] at 13:35 13 June 2016 years old and older (45.2 percent, 85 and older; Hing 1987), resource use could potentially be high. Indeed, nursing home patients, on average, generate 6.2 percent higher charges than Medicare patients admitted from other sources (Jencks and Kay 1987). Further, these patients more than likely represent a potentially problematic discharge since most will continue to need a long-term care bed on discharge.…”

Cost-Benefit Issues in the Practice of Internal Medicine

“…(6) Laboratory test panels are costeffective only if a significant number of tests from the panel are needed. (7) Do not order multiple tests that measure the same thing. (8) Newer tests and therapies are often expensive and should be ordered only if they are clearly superior to the older ones.…”