Download Medicare Hospital Subsidies: Money in Search of a Purpose by Sean Nicholson PDF

By Sean Nicholson

ISBN-10: 0844741744

ISBN-13: 9780844741741

This examine reports the rationales, legislative heritage, and monetary incentives of either different types of sanatorium subsidies.

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Extra resources for Medicare Hospital Subsidies: Money in Search of a Purpose

Sample text

For New York and Massachusetts hospitals, ∆P measures the change in marginal IME payments in 1986 rather than in 1984 as with hospitals in the original 46 nonwaiver states. ∆P is zero for all New Jersey and Maryland hospitals because they were excluded from the PPS system during 1984 to 1991. The coefficient β3 measures how responsive the number of residents is to a change in the price of a resident. β3 is expected to be positive; an increase in the IME payment per resident lowers the cost of a resident and should increase a hospital’s demand for residents.

Nonteaching hospitals would no longer be financing the DME 24 MEDICARE HOSPITAL SUBSIDIES payments, and teaching hospitals would no longer have incentives to hire more than the efficient amount of residents (the amount of residents that minimize the cost of hospital care). Under this revised payment system, teaching hospitals would be compensated for the care that their residents provide to Medicare beneficiaries, just as their nurses and other labor and nonlabor inputs are compensated. The Balanced Budget Act of 1997 required the Medicare Payment Advisory Commission to examine whether any changes should be made to Medicare’s graduate medical education policy.

70 percent. If the DSH-eligible hospitals in this sample are representative of the 1,900 hospitals that receive DSH payments, the policy is predicted to lead to 164,000 incremental Medicaid admissions per year and 23,000 fewer charity care admissions per year than would otherwise occur. 5 Conclusion There are two fundamental problems with the Medicare graduate medical education program and the disproportionate share hospital program. First, the IME and DSH programs are not well supported by economic theory.

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