The long-term impact of Medicare payment reductions on patient outcomes
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Authors
Wu, Vivian Y.
Shen, Yu-Chu
Subjects
Medicare payment reductions
patient outcomes
patient outcomes
Advisors
Date of Issue
2012-03
Date
Publisher
National Bureau of Economic Research (NBER)
Language
Abstract
This study examines the long-term impact of Medicare payment reductions on patient outcomes using a natural experiment - the Balance Budget Act (BBA) of 1997. We use predicted Medicare revenue changes due to BBA, with simulated BBA payment cuts as an instrument, to categorize hospitals by degrees of payment cuts (small, moderate or large) and follow Medicare patients outcomes in these hospitals over a 11 year panel: 1995-1997 pre-BBA, 1998-2000 initial years of BBA, and 2001-2005 post-BBA years. We find that Medicare AMI mortality trends stay similar across hospitals when comparing between pre-BBA and inital-BBA periods. However, the trends began to diverge in 2001-2005; hospitals facing large payment cuts saw increased mortality rates relative to that of hospitals facing small cuts in the post-BBA period (2001-2005) after controlling for their pre-BBA trends. We find support that part of the higher AMI mortalities among large-cut hospitals are explained by reductions in staffing level and operating costs following the payment cuts.
Type
Working Paper
Description
NBER Working Paper No. 16859
Series/Report No
Department
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NPS Report Number
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Funding
Format
35 p.
Citation
Distribution Statement
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.