Effects of Medicare's Prospective Payment System on the Quality of Hospital Care
Jun 13, 2006
Published in: JAMA, Journal of the American Medical Association, v. 264, no. 15, Oct. 17, 1990, p. 1969-1973
Posted on RAND.org on January 01, 1990
The authors developed explicit process criteria and scales for Medicare patients hospitalized with congestive heart failure, myocardial infarction, pneumonia, cerebrovascular accident, and hip fracture. They applied the process scales to a nationally representative sample of 14,012 patients hospitalized before and after the implementation of the diagnosis related group-based prospective payment system. For the four medical diseases, a better process of care resulted in lower mortality rates 30 days after admission. Patients in the upper quartile of process scores had a 30-day mortality rate 5% lower than that of patients in the lower quartile. The process of care improved after the introduction of the prospective payment system; e.g., better nursing care after the introduction of the prospective payment system was associated with an expected decrease in 30-day mortality rates in pneumonia patients of 0.8 percentage points, and better physician cognitive performance was associated with an expected decrease in 30-day mortality rates of 0.4 percentage points. Overall, process improvements across all four medical conditions were associated with a 1 percentage point reduction in 30-day mortality rates after the introduction of the prospective payment system.
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