Interest in case-mix measures for use in nursing home payment systems has been stimulated by the Medicare prospective payment system (PPS) for short-term acute-care hospitals. Appropriately matching payment with care needs is important to equitably compensate providers and to encourage them to admit patients who are most in need of nursing home care. The skilled nursing facility (SNF) Medicare ...

This paper addresses the impact of payment systems on the rate of technology adoption. We present a model where technological shift is driven by demand uncertainty, increased patients’ benefit, financial variables, and the reimbursement system to providers. Two payment systems are studied: cost reimbursement and (two variants of) DRG. According to the system considered, adoption occurs either w...

Several federal bodies provide ongoing analyses of the Medicare DRG prospective hospital payment system. Many states are using DRG prospective "all payor systems" for hospital reimbursement (based on the federal model). In All Payor Systems, Medicare, Medicaid, Blue Cross and other commercial insurers pay by the DRG mode; New York State has been All Payor since 1/1/88. This study simulated DRG ...

background equity of access to health and provider payment mechanism in healthcare is a worldwide debated. healthcare reforms are primarily designed to improve productivity, economic efficiency and quality of care; however, an appropriate reimbursement of healthcare providers for services offered to patients and marinating a robust payment mechanism are not elucidated yet. conclusions no single...

Under the Medicare diagnosis-related group (DRG) based inpatient prospective payment system (IPPS), payments to hospitals can increase when a post-admission complication occurs. This article proposes a redesign of IPPS that reduces, but does not eliminate, the increase in payment due to post-admission complications. Using California data that contained a specification of whether each diagnosis ...

A trial project to introduce a Japanese version of the diagnostic related group/prospective payment system (DRG/PPS) was conducted at ten national hospitals from November 1998. However, many problems have surfaced—foremost among them were incomplete DRG classifications, inadequate reviews of payment amounts that simply reflected the past performance of the hospitals, and incomplete databases th...

This study investigates dynamic incentives to select patients for hospitals which are remunerated according to a prospective payment system of the DRG type. Using a model with patients differing in severity within a DRG, we show that price dynamics depend on the extent of hospital altruism and the relation between patients’ severity and benefit. Upwards and downwards price movements over time a...

Data supporting the existence of a relationship between reimbursement and quality are limited. We assessed the association between quality of care for 34,318 patients hospitalized with heart failure across the US and heart failure Diagnosis-Related Group (DRG) payment for the 3,905 hospitals at which patients were admitted. Payment varied from $2606 to $11,845. We found a discontinuous relation...

Medicare's prospective payment system (PPS) for hospital cases is based on diagnosis-related groups (DRGs). A wide variety of other third-party payers for hospital care have adapted elements of this system for their own use. The extent of DRG use varies considerably both by type of payer and by geographical area. Users include: 21 State Medicaid programs, 3 workers' compensation systems, the Ci...