The Impact of Intra-Drg Severity of Illness on Hospital Profitability: Implications for Payment Reform

Rosko, Michael D.; Carpenter, Caryl E.

doi:10.1215/03616878-19-4-729

Cited by 28 publications

(14 citation statements)

References 14 publications

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“…While these studies present strong evidence of payer‐based selective referrals, evidence of severity‐based selection is mixed. Rosko and Carpenter (1994) find that intra‐DRG severity of illness is positively related to expenditures and is inversely related to hospital profits, indicating the potential for severity‐based referrals to increase profits. Even so, Newhouse (1989) finds that high‐severity patients are no more likely to be treated at public hospitals than private hospitals, suggesting that private hospitals do not shun high‐severity patients.…”

Section: The Hospitalization Decisionmentioning

confidence: 90%

Patient Admission Patterns and Acquisitions of “Feeder” Hospitals

Nakamura

Capps

Dranove

2007

Economics Manag Strategy

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Acquiring outlying community hospitals is one approach commonly used by large tertiary care hospitals to increase referrals. Sophisticated acquirers may also seek to selectively increase referrals of more profitable patients. To explore these issues, we study vertical hospital acquisitions. Using a treatment and control framework, we find that roughly 30% of vertical acquisitions lead to a significant increase in referrals. Very few result in decreases. We find that increases are concentrated among patients undergoing more profitable procedures and with more generous insurance. However, we find no evidence that hospitals shun patients with higher expected costs of care.

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Section: The Hospitalization Decisionmentioning

confidence: 90%

Patient Admission Patterns and Acquisitions of “Feeder” Hospitals

Nakamura

Capps

Dranove

2007

Economics Manag Strategy

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“…43,44 Additionally, year dummy variables were included to identify the study years, with the year of 1996 in the referent category.…”

Section: Methodsmentioning

confidence: 99%

Did Budget Cuts in Medicaid Disproportionate Share Hospital Payment Affect Hospital Quality of Care?

et al. 2014

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Background Medicaid Disproportionate Share Hospital (DSH) payments are one of the major sources of financial support for hospitals providing care to low-income patients. However, Medicaid DSH payments will be redirected from hospitals to subsidize individual health insurance purchase through US national health reform. Objectives The purpose of this study is to examine the association between Medicaid DSH payment reductions and nursing-sensitive and birth-related quality of care among Medicaid/uninsured and privately insured patients. Research Design and Method Economic theory of hospital behavior was used as a conceptual framework, and longitudinal data for California hospitals for 1996–2003 were examined. Hospital fixed effects regression models were estimated. The unit of analysis is at the hospital-level, examining two aggregated measures based on the payer category of discharged patients (i.e., Medicaid/uninsured and privately insured). Principal Findings The overall study findings provide at best weak evidence of an association between net Medicaid DSH payments and hospital quality of care for either Medicaid/uninsured or the privately insured patients. The magnitudes of the effects are small and only a few have significant DSH effects. Conclusions Although this study does not find evidence suggesting that reducing Medicaid DSH payments had a strong negative impact on hospital quality of care for Medicaid/uninsured or privately insured patients, the results are not necessarily predictive of the impact national health care reform will have. Research is necessary to monitor hospital quality of care as this reform is implemented.

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“…Steinwald and Dummit (1989) reported on two studies that showed that DRG creep results in significant changes in DRG case-mixes that have a significant influence on reimbursement rates. In considering the impact of the intra-DRG severity of illness on hospital profitability, Rosko and Carpenter (1994) examined 201 hospitals in Pennsylvania and found that hospital profits were inversely related to the severity of illness.…”

Section: Performance Researchmentioning

confidence: 99%

A review and synthesis of demand management, capacity management and performance in health‐care services

Jack

Powers

2009

Int J Management Reviews

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Responses to demand uncertainty in the field of health-care services is a very timely research issue because of ongoing changes in demand patterns that are driven by demographics and recent changes in the delivery of these services. Despite its importance to researchers, the literature on demand management, capacity management and performance in health care has not been extensively reviewed. The present paper addresses this need by analyzing and synthesizing 463 articles published between 1986 and 2006. The key contributions of this work are the analysis and synthesis of research on demand management, capacity management and performance, along with an agenda to guide future research in this important area.

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The Impact of Intra-Drg Severity of Illness on Hospital Profitability: Implications for Payment Reform

Cited by 28 publications

References 14 publications

Patient Admission Patterns and Acquisitions of “Feeder” Hospitals

Patient Admission Patterns and Acquisitions of “Feeder” Hospitals

Did Budget Cuts in Medicaid Disproportionate Share Hospital Payment Affect Hospital Quality of Care?

A review and synthesis of demand management, capacity management and performance in health‐care services

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