The impact of medicare capital prospective payment regulation on hospital capital expenditures
نویسندگان
چکیده
Our study examines the impact of the capital prospective payment system (CPPS), implemented by Medicare in 1991, on capital expenditures and cost-eective behavior of non-proprietary hospitals. As noted in the paper, we use audited ®nancial statement data for a large national sample of hospitals. Univariate analyses demonstrate a statistically signi®cant decline in capital expenditures in the years following the CPPS regulation without signi®cant changes in relative aggregate operating expenses. These preliminary ®ndings suggest that CPPS induces some cost-eective behavior by hospital managers. Ordinary least-squares (OLS) regressions indicate that capital expenditures before and after CPPS are dierently aected by the changes in most explanatory variables. Further OLS regressions indicate that high-cost (low-cost) hospitals decrease (increase) capital expenditures following CPPS, once other factors are controlled for. Managerial accounting implications for hospitals include the eect of the regulation on capital budgeting decisions. Greater accounting disclosure may be necessary so that alternative modes of coping with the regulation can be discerned. Policymakers and regulators should also be aware that although reductions in capital expenditures may have favorable short-term eects of reducing health care costs, a potentially negative public health impact may result if capital expenditures continue to decrease. Ó 2000 Published by Elsevier Science Ltd. All rights reserved. Journal of Accounting and Public Policy 19 (2000) 9±40 * Corresponding author. Tel.: +1-330-672-2545-x379; fax: +1-330-672-2548. E-mail address: [email protected] (R. Barniv). 0278-4254/00/$ see front matter Ó 2000 Published by Elsevier Science Ltd. All rights reserved. PII: S0 2 78 -4 2 54 (9 9 )0 00 2 65
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