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New Study Shows 'No Medicare Savings' if Congress Moves Against Physician Owned Hospitals.
Date:12/17/2009

and have a large number of comorbid conditions).(4) Medicare's rate setting process is described in the Appendix.

In the current study, we analyze a small number of high-volume DRGs common to POHs and non-POHs. We calculate mean allowed severity-adjusted Medicare charges for POHs and non-POHs in the same metropolitan area. Our results confirm the expected finding that mean allowed charges by POHs are consistently lower than allowed charges of non-POHs in the same community.

METHODS

There are two parts to the analysis. In Part I, we calculate the median difference between all MS-DRGs(5) that we were performed in POHs and non-POHs in the same metropolitan area. There were 67 MS-DRGs that met these criteria.

In Part II, we selected six relatively high-volume MS-DRGs representing cardiac and orthopedic care-- services that are common to POHs and non-POHs. These focal MS-DRGs are shown in Table 1.

TABLE 1 - MS-DRGs Selected for Analysis




    MS-DRG    Description
    ------    -----------
    291       Heart failure & shock w/ MCC
    292       Heart failure & shock w/ CC
    293       Heart failure & shock w/o CC
    460       Spinal fusion except cervical w/o MCC
    470       Major joint replacement, lower ext. w/o CC
    491       Back & neck proc w/o spinal fusion w/o MCC
    ---       ------------------------------------------


For both parts, data on median allowed Medicare charges were retrieved from the dataset version of CMS's Hospital Compare data. (6) The use of MS-DRGs helps reduce the effects of case mix severity, which can impact the cost of hospital care. These data were retrieved for all hospitals in markets (defined as metropolitan statistical areas, or MSAs) with at least one POH. This enabled the direct comparison of allowed charges between POHs and non-POHs in the same market.

RESULTS

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SOURCE Physician Hospitals of America
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