The characteristics of the four subgroups suggested different needs for Medicare services and different risks of various outcomes such as hospital readmission and mortality. Section D discusses hospital readmission patterns by examining rates of readmission at specific intervals after hospital admission. The second component is a grade or weight for each person representing how much each person is described by the characteristics associated with a given case-mix dimension. In the SNF group we also see declines in the severely ADL impaired population with increases in the "Mildly Disabled" and "Oldest-Old" populations--again suggesting a change in case mix representing increased acuity of a specific type. On the other hand, a random sample of the much more frequent hospital episodes was selected. Finally, hospital readmissions did not change significantly between the pre- and post-PPS periods, although the measure of hospital readmission that was used was very limited, i.e., readmission to the same hospital during the same quarter of observation. In addition, changes in patterns of hospitalization were compared between the institutionalized and noninstitutionalized elderly patients. There was an overall increase in the average durations of these episodes, from 231 days to 237 days. Prospective payment systems have become an integral part of healthcare financing in the United States. Finally, after controlling for the number of high risk comorbidities within each stage and principal disease, the results suggested a higher mortality count in 1985 than was actually observed. In choosing to benchmark our hospital readmission risks on those entering hospital, we effectively compared all individuals who entered hospitals in the two time periods. In a second study, Krakauer (HCFA, 1987) analyzed the effectiveness of care provided to Medicare beneficiaries during hospitalization and thereafter in 1983-85. This definition of coterminous services has the potential effect of reducing the rates of post-hospital utilization of SNF or HHA services. In addition, the proportion of all patients originally hospitalized who were receiving care in a nursing home six months after discharge increased from 13 percent to 39 percent. The fact that hospital LOS overall did not differ statistically between 1982 and 1984 after case-mix adjustments suggests that minimal changes in LOS resulted from PPS for the disabled elderly that are the subject of this analysis. Table 1 shows that nondisabled, noninstitutionalized persons had shorter hospital stays than either the community disabled or the institutionalized. Third-quarter data from a cohort of 729 short-term acute care hospitals for 1980-1984 were used in this analysis. There was a decline in average LOS for all SNF episodes from 69.9 days to 37.7 days. Comparisons were then made between the expected (severity adjusted) mortality rate and the observed 1985 mortality rates. Increases in the role of hospital outpatient care, for example, is illustrated by the fact that the percent of surgical charges under Medicare Part B incurred in hospital outpatient settings has been increasing dramatically. Abstract In 1983, the U.S. Congress passed the Social Security Reform Act establishing a prospective payment system (PPS) for hospitals under the Medicare program. There were no statistically significant differences before and after PPS in the patterns of hospital, SNF and HHA episodes. Table 5 presents the discharge patterns of individuals who experienced Medicare SNF use pre- and post-PPS and the length of stay in Medicare SNFs. Mortality was evaluated in a fixed 30-day interval from admission. The high level of disability is associated with neurological diseases, including Parkinson's disease, multiple sclerosis and epilepsy. Finally, it is important to provide education and training for healthcare providers on how to use the system effectively. In conclusion, our study on the effects of hospital PPS on the functionally impaired subgroup of Medicare beneficiaries found expected changes in service utilization and no system-wide adverse outcomes. In our presentation of results we indicate statistical significance at .05 and .10 levels. The GOM profiles represent subgroups of the total samples which were relatively homogeneous in terms of these characteristics. The study found no significant differences before and after PPS in the location of the hip fracture, associated proportions or types of comorbid conditions. Finally, our use of the Medicare enrollment files allowed us to measure mortality when individuals were receiving Medicare Part A services and also when they were not. Instead, the RAND team undertook a massive data-collection effort. In addition, providers may need to adjust existing processes and procedures to accommodate the changes brought about by the new system. In the following sections on Medicare service use, these GOM groups are used to adjust overall utilization differences between pre- and post-PPS periods. The authors noted that since changes in hospitalization were seen only in the institutionalized population, the possibility existed that the frail elderly may represent a unique segment of the Medicare population that is vulnerable to the changes in health care provision encouraged by PPS. Santa Monica, CA: RAND Corporation, 2006. https://www.rand.org/pubs/research_briefs/RB4519-1.html. https:// This suggests a reduction in hospital readmission from SNFs since most SNF stays are preceded by hospital stays. This provides a procedure for testing whether the case-mix stratifications (or any other stratification such as the service use differences between 1982-83 and 1984-85 intervals) is "significant." For initial hospitalizations followed by SNF use, the risks of readmission to a hospital increased from 7.3 percent to 9.2 percent for the 0-30 days interval and from 31 percent to 33.2 percent for the 0-90 day interval. Hence, this analysis embodied representative samples of each pair of hospital admissions (e.g., first and second, second and third, etc.) Explain the classification systems used with prospective payments. This refinement of the comparison of observed differences in patterns indicated that statistically significant differences (at the .05 level) were found for the hospital stays that ended with admission to HHA. 1997- American Speech-Language-Hearing Association. Sager, M.A., E.A. Population Subgroups as Case-Mix. ji1Ull1cial impact and risk that it imposed on Jhe . Shaughnessy, P.W., A.M. Kramer, and R.E. Comment on what seems to work well and what could be improved. prospective payment system was measured through the . These results are consistent with findings by other researchers (DesHarnais, et al., 1987). Different Most characteristic of this group are high risks of cardiovascular (e.g., 80% arteriosclerosis) and lung diseases (e.g., 44% bronchitis) which are associated with high likelihood of diabetes (45%) and obesity (50%). This result is analogous to our comparison of the 1982-83 and 1984-85 windows. The study found virtually no changes in Medicare SNF use after PPS was implemented. Through prospective payment systems, each episode of care is assigned a standardized prospective rate based on diagnosis codes and other factors, such as patient characteristics or geographic region. These are the probabilities that person on the kth dimension have response level l for variable j. The proportion discharged to self-care dropped more than 3%, while the proportion discharged home with home health care rose almost 2%. Harrington . This HHA pattern reflects similar changes in the community population which becomes older and has more severely disabled persons. The second analysis strategy focused on outcomes subsequent to hospital admission. In the following, we briefly discuss five studies that addressed various dimensions of the effects of PPS on hospital utilization and outcomes of patients. Hence, a post-hospital SNF stay, if it started several days after a hospital discharge, would not be recorded as the disposition of the hospital episode. Outcomes. While also based on episodes rather than beneficiaries, this analysis keyed events to a hospital admission. Results of our study provided further insights on the effects of PPS on utilization patterns and mortality outcomes in the two periods of time. Similar results were obtained after the authors excluded extended hospitalization cases from the pre-PPS sample. The complementary intervals of time when these Medicare services were not used were also defined. U.S. Department of Health and Human Services The payment amount for a particular service is derived based on the classification system of that service (for example, diagnosis-related groups for inpatient hospital services). This method of payment provides incentives for hospitals to serve patients as efficiently as possible, possibly by reducing length of stay and increasing use of skilled nursing facility (SNF) and home health (HHA) care. Since our data set contained only Medicare Part A service use records, we were not able to determine the relationship between Medicare Part A service use and other Medicare service use, such as outpatient care, and non-Medicare services, such as nursing home care privately paid or paid by Medicaid. Additionally, prospective payment systems simplify administrative tasks such as claims processing, resulting in faster reimbursement times. The implementation of a prospective, fixed rate payment system for hospitals under Medicare created both a perception that hospital efficiency could be improved and concern that incentives for efficiency could result in adverse consequences for Medicare beneficiaries. Thus, an groups experienced notable declines in hospital LOS with the institutionalized having the largest decline (i.e., 2.0 days). prospective payment systems or international prospective payment systems. However, the impact on mortality of discharge in unstable condition did not outweigh other quality improvements, because overall mortality fell. First, GOM is capable of dealing with large numbers of correlated discrete variables and reducing them to a smaller, more manageable number of dimensions. Thus the HHA population has, in contrast to the SNF population, become more chronically disabled and even older. This distribution across time periods allowed before-and-after comparisons among patient groups. In summary, we found that hospital lengths of stay decreased between 1982-83 and 1984-85 for the subgroup of disabled, non-institutionalized Medicare beneficiaries, but that much of this chance was attributable to case-mix changes. Other Episodes. This section presents the results of the analyses of the pre- and post-PPS utilization of Medicare services experienced by the noninstitutionalized disabled elderly beneficiaries. Assistant Policy Researcher, RAND, and Ph.D. Student, Pardee RAND Graduate School, Ph.D. Student, Pardee RAND Graduate School, and Assistant Policy Researcher, RAND. As a result, these systems, sometimes referred to as PPS in healthcare or prospective payment system PPS have become increasingly popular among healthcare organizations seeking to improve their financial performance. Specialization--economies of scale. In that study, Shaughnessy and colleagues found that the proportion of Medicare HHA patients admitted from home increased from 23.6 percent in 1982 to 38.5 percent in 1986. Faced with sharply escalating Medicare costs in the early 1980s, the federal government completely revised the way Medicare pays hospitals for treating elderly patients. Distinct from prior studies which addressed the general Medicare population, our analysis focused on PPS effects on disabled elderly Medicare beneficiaries. We discuss the GOM methodology in greater detail in the following section on statistical methodology. Similarly, the other outcome measures evidenced no post-PPS declines in quality of care. PPS in healthcare has since become a widely accepted payment model across the United States and has facilitated a more standardized approach to healthcare. "Cost-based provider reimbursement" refers to a common payment method in health insurance. This allows both parties to budget accordingly, reducing waste and improving operational efficiency. 1982: 12.1%1984: 12.5%Expected number of days before death. I am a relatively new student and I contacted financial aid regarding my upcoming disbursement. With the prospective payment system, or PPS, the provider of health care, such as a hospital, receives one fixed payment for a particular type of care over a particular period of time. Prospective payment plans assign a fixed payment rate to specific treatments based on predetermined factors. For each group, two categories of quality measures were analyzed: outcomes and process of care. This irregular pattern suggests that there is no consistent elevation of mortality for the total elderly population, and that any pre- and post-analysis of mortality must be interpreted with these secular irregularities in mind. The authors posited two possible explanations for the increased hospitalization of institutionalized persons: (1) physician manipulation of PPS by discharging nursing home residents only to have them scheduled for readmission at a later date and (2) shorter hospital stays representing premature hospital discharges that resulted in more frequent rehospitalizations. The results of the prior studies provide initial insights on the effects of PPS on Medicare patients. In addition, we found a slightly higher rate of SNF episodes resulting in discharge to hospital (23.4 versus 25.4 percent) suggesting the possibility of increased hospital readmission for this group. We also found a significantly (p =.10) higher mortality rate among the "other" i.e., non-Medicare Part A service) episodes. These characteristics included medical conditions, dependencies in activities of daily living (ADL) and instrumental activities of daily living (IADL). Other researchers, in contrast, addressed the PPS assessment issues using trend analysis strategies (DesHarnais, et al., 1987). Krakauer, H. "Outcomes of In-Hospital Care of Medicare Patients: 1983-1985." In the GOM procedure, a person may be described by more than one continuously varying case-mix dimension. This representation of RAND intellectual property is provided for noncommercial use only. Our specific aims were to measure changes in Medicare service use and to evaluate the effects of these changes on quality of care in terms of hospital readmission and mortality. The group is not particularly old, with 95% being under 85 years of age, and is predominantly female. 1982: 287 days1984: 287 days* Adjusted for competing risks of readmission and end of study. Fewer un-necessary tests and services. In comparing the proportion of hospital readmissions for the one-year windows between the pre-PPS and post-PPS periods, Table 13 shows a small decline in readmissions among the hospital episodes that were followed by SNF care (36% vs. 33.9%), similar proportions when HHA were used after hospitalization and a small decline for the cases involving no post-acute care. The broad focus of prospective payment system PPS on patient care contrast favorably to the interval care more prevalent in other long-established payment methods. For the analyses where utilization patterns were examined for specific case-mix groups, specialized cause elimination life table methodologies were developed to derive life table functions for each of the case-mix subgroups. Our study was designed to provide information to assess PPS effects on the functionally impaired subgroup of Medicare beneficiaries. For example, Krakauer's study found no increase in the rates of hospital readmissions between 1983-84 and 1985. For example, while LOS declined for persons with mild disabilities, they remained the same for those with medically acute conditions. As these studies are completed, policy makers will have a better understanding of the effects of PPS on the provision and outcomes of various t3rpes of Medicare as well as non-Medicare services. In a third study, Conklin and Houchens (1987) assessed changes in mortality rates of Medicare hospital admissions between fiscal years 1984 and 1985, while adjusting for differential case-mix severity in the two years. Severity of principal disease, number of high risk comorbidities, age and sex formed the basis of the classification system. It should be recalled that "other" refers to all periods when Medicare Part A services were not received. Final Report. = 11Significance level = .250, Proportion of Hospital Episodes Resulting in Death, Probability (x 100) of Death in Interval. Patients hospitalized or institutionalized at the time of fracture, with a history of a previous hip fracture, or with a neoplasm as a known or suspected cause were excluded from the study. Declines in hospital LOS was expected because of the PPS incentive to hospitals to become more efficient. Assistant Secretary for Planning and Evaluation, Room 415F Following are summaries of Medicare Part A prospective payment systems for six provider settings. Table 15 also presents, for persons who died, the proportion of deaths that occurred within 30 and 90 days in the given type of episode. To export the items, click on the button corresponding with the preferred download format. Hence, the research file contained detailed patient characteristics information for two points in time, straddling the implementation of PPS, and complete Medicare Part A hospital, SNF and home health utilization and mortality information. Also, both groups walked with similar abilities before the fracture. The collective results of the study led the authors to conclude that there was no evidence to indicate that the quality of care has declined during the first two years of PPS. Post-acute use of SNF or HHA did not influence either hospital readmission or mortality rates. Xsens Revenue Growth Rate in Industrial Inertial Systems Business (2017-2022) Figure 61. Table 4 also shows a decline in the proportion of hospital admissions that resulted in a discharge to Medicare SNF services (5.2% versus 4.7%), although discharge to HHA care increased from 12.6 percent to 15.6 percent. Within the constraints of the data set that was assembled for this study, we could find only indications of hospital readmission increases for the severely disabled subgroup, but this change was only from 23.4 percent to 25.4 percent before and after PPS implementation. Similarly, relatively little information currently exists on the status of patients discharged from hospitals in terms of their health status and use of community based recuperative and rehabilitative care. Manton, K.G., E. Stallard, M.A. An episode was based on recorded dates of service use from the Medicare records. Managed care organizations also known as MCOs produce revenue by effectively allocating risk. Because of this, GOM is distinct from the classification methodology used to identify the DRG categories or hospital reimbursement by which homogeneous discrete groups are defined in terms of the variation of a single criterion (i.e., charges or length of stay) except where clinical judgment was used to modify the statistically defined groups; and each case is assigned to exactly one group and thus does not represent individual heterogeneity in the classification. Type II, the Oldest-Old, with hip fractures, for example, would be expected to require post-acute care for rehabilitation. In both the service use and the outcome analyses, we conducted analyses where we stratified the NLTCS samples by relatively homogeneous subgroups of the disabled population. .gov cerebrovascular accident (CVA), or stroke. This allows, for example, for comorbidities to serve as descriptors of the stage of the natural history of a specific condition, as well as to describe the pattern of comorbidities. Drawing upon decades of experience, RAND provides research services, systematic analysis, and innovative thinking to a global clientele that includes government agencies, foundations, and private-sector firms. Across all of these measures, mortality declined for all five patient groups. The NLTCS contained detailed information on the health and functional characteristics of nationally representative samples (about 6,000) of noninstitutionalized disabled Medicare beneficiaries in 1982 and in 1984. Because of the recent introduction of PPS, relatively few evaluation results have been available to study its effects on Medicare service use and patients. In addition, mortality events from Medicare enrollment files were obtained. The Grade of Membership analysis of the period 1982-83 and 1984-85 NLTCS data produced four relatively homogeneous subgroups. Specifically, we employed cause elimination life table methodology to determine the duration specific probability of death adjusted for differential admission rates to hospital in the two periods. There are only a few changes to make in the HMO model to describe the Medicare PPS systems for hospitals, skilled nursing facilities, and home health agencies. Medicares prospective payment system (PPS) did not lead to significant declines in the quality of hospital care. Easterling. The higher LOS of the latter groups is probably related to their functional disabilities. Because of the potential heterogeneity of situations represented by the "other" episodes, pre-post PPS changes in this type of episode must be interpreted with caution. Several reasons can be suggested for the increase in HHA use. In terms of outcomes of hospital use related to quality of care, no difference in overall readmissions or mortality pre- and post-PPS were found. We found no overall changes in the risks of hospital readmission and eventual mortality among Medicare hospital patients. The Assistant Secretary for Planning and Evaluation (ASPE) is the principal advisor to the Secretary of the U.S. Department of Health and Human Services on policy development, and is responsible for major activities in policy coordination, legislation development, strategic planning, policy research, evaluation, and economic analysis. Hence, our decision rule probably produced lower rates of post-acute Medicare SNF and HHA utilization rates. In response to your peers, offer another potential impact on operations that prospective systems could have. Post-hospital use of Medicare skilled nursing facilities did not increase, as might be expected in light of PPS incentives to substitute post-acute nursing home days for hospital days. Finally, we discuss the implications of our findings and review the limitations of this study. In 1985, the corresponding rates were 6.8 percent and 21.2 percent. This week you will, compare and contrast prospective payment systems with non-prospective payment systems. Rheumatism and arthritis (58%)"Young-Olds" (10% over 85)50% married53% male67% good-excellent health on subjective scale3% with prior nursing home stay47% with no helper days, Problems with transfer (72%), mobility, toileting and bathingAll IADLsHip fractures (8%: RR=3:1), other breaks (14%: RR=2:1)GlaucomaCancer50% over 85 years old70% not married70% female22% prior nursing home stay (RR=2:1)Home nursing service (.25) and therapist (.06), Bathing dependent and IADLs100% arthritis, 62% permanent stiffness45% diabetes, 50% obeseHighest risks of cardiovascular and lung diseases95% female95% under 85, 60% with ADL for eating, 100% all other ADLsBedfast (11%); chairfast (32%)70% incontinent (27% with catheter or colostomy)Parkinsons, mental retardation (10%)Senile (60%)Stroke, some heart and lung48% male, 58% married, 25% over 85, 20% Black80% with poor subjective health19% with prior nursing home use. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. DRG payment is per stay. However, we were unable to determine with our data source if post-acute use of non-Medicare nursing home care increased after implementation of PPS. For example, the proportions of hospital episodes resulting in readmission within the one-year observation periods were 39.3% pre-PPS and 38.4% post-PPS. PPS replaced the retrospective cost-based system of pay This file will also map Zip Codes to their State. ** One year period from October 1 through September 30. By following these best practices, prospective payment systems can be implemented successfully and help promote efficiency, cost savings, and quality care across the healthcare system. In summary, we did not find statistically significant changes in mortality patterns after hospital admissions (i.e., in hospital and after discharge to some other location). Since the case-mix weights must add to one, adding up the weighted life tables must reproduce the life table for the total population, i.e., the population before stratifying by the case-mix weights. HOW IT WORKS CONTACTTESTIMONIALSTHE TEAMEVENTSBLOGCASE STUDIESEXPLAINERSLETS SOCIALIZE. The Outpatient Prospective Payment System (OPPS) is the system through which Medicare decides how much money a hospital or community mental health center will get for outpatient care to patients with Medicare. Initially the objectives of the PPS ( prospective payment system ) were to " ensure fair compensation for services rendered and not compromise access , update payment rates that would account for new medical technology and inflation , monitor the quality of hospital services , and provide a mechanism to handle complaints " ( Harrington 2016 ) . 1982: 39.3%1984: 38.4%Expected number of days before readmission. Paul Eggers, Jim Vertrees, Bob Clark and Judy Sangl read earlier drafts of this report and provided many insightful comments and suggestions. Medicare's prospective payment system (PPS) reimburses hospitals on a casemix adjusted, flat-rate basis. Post Acute HHA Use. Some common characteristics of Medicare PPS are: Medicare Hospital Outpatient PPS (OPPS) is not a "pure" PPS methodology consistent within the characteristics listed above because payment is made for individual evaluation and treatment visits. The implementation of a prospective payment system is not without obstacles, however. The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely. = 11Significance level = .750, Proportion of Hospital Episodes Resulting in Readmission, Probability (x 100) of Readmission in Interval, Expected Number of Days Before Readmission. We wish to thank many people who helped us throughout the course of this project. For example, there might have been substitution between hospital and SNF care for the mildly disabled, but for the heart and lung disease patients, no differences in hospital length of stay was observed. 1985. Adding in additional variables to the GOM analysis to help objectively redefine the case-mix dimensions by increasing the scope of measures used in their definition. These incentives suggest that nursing homes and home health care with lower per them costs would be employed as substitutes for hospital days. The finding that admission rates to hospitals from SNFs, HHAs and the community declined between the pre- and post-periods, is also consistent with other studies results showing declining hospital admission rates for all Medicare beneficiaries (Conklin and Houchens, 1987). Woodbury, M.A. Bundled payment interventions may aggregate costs longitudinally (i.e., over time within a single provider), aggregate costs across providers, and/or involve warranties Using the GOM procedure, a prespecified number (say K) of dimensions can be identified from the available information.
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