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

esults of Part I were that, for the 67 MS-DRGs, the median difference in allowed Medicare charges was $734.19 lower. Put differently, the "typical" patient treated in a POH will have allowed charges $734.19 lower than the same case treated in a non-POH.(7) This represents a 4.6% difference between POHs and non-POHs.

The results of Part II, which focuses on the six MS-DRGs, show similar differences between POHs and non-POHs. For all six MS-DRGs, median allowed charges for POHs were significantly less than median allowed charges by non-POHs in the same MSA. The magnitude of the significant differences ranged from 3.6% to 11.1% (Table 2). These differences were statistically significant for four of the six MS-DRGs (one of the cardiac codes and all three orthopedic codes).

TABLE 2 - Differences in Medicare Allowed Charges, POH v. Non-POH




    MS-DRG  Non-POH       POH      Diff.   % Diff.
    ------  -------       ---      -----   -------
    291      $7,875     $7,716     -$159    -2.0%
    292      $6,148     $5,926     -$222    -3.6%*
    293      $5,209     $5,193      -$16    -0.3%
    460     $21,162    $18,892   -$2,270   -10.7%*
    470     $11,751    $10,730   -$1,021    -8.7%*
    491      $6,098     $5,424     -$674   -11.1%*
    ---      ------     ------     -----   -------



Note: * = difference is statistically significant at p = .05

These results confirm that on a per-case basis, adjusted for severity, the Medicare program pays less for care provided in POHs as compared to payments to non-POHs in the same community. The average difference, across all six MS-DRGs, is approximately 6%.

This analysis is consistent with our earlier econometric study, and serves to further illustrate the importance of non-trivial differences in per-case allowed charges. Multiplied over the total national number of cases in each of these MS-DRGs, the cost implications of moving P
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SOURCE Physician Hospitals of America
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