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

Entry," Contemporary Economic Policy In Press (2009).

(3) Payment levels are also adjusted for local wages (via the wage index) and overall patient acuity (via the case-mix index). For the purposes of this simple model, we ignore these because they are based on normalized indices as opposed to "add ons."

(4) There are a number of studies that have documented these differences. See generally GAO, "Comparative Analyses of Payments for Selected Hospital Services," in Report to the Subcommittee on Health, Committee on Ways and Means, House of Representatives (Washington, DC: U.S. General Accounting Office, 1990), S. Nicholson, "The Effects of Medicare Payment Subsidies to Teaching Hospitals," Leonard Davis Institute of Health Economics Issue Brief 7, no. 4 (2002).

(5) According to CMS, "Patients that have similar clinical characteristics and similar costs are assigned to an MS-DRG. The MS-DRG will be associated with a fixed payment amount based on the average cost of patients in the group. Patients are assigned to a MS-DRG based on diagnosis, surgical procedures, age and other information. Medicare uses this information that is provided by hospitals on their bill to decide how much they should be paid."

(6) Median Medicare payments for the same MS-DRG refers to the midpoint of all payments to the hospital for a particular MS-DRG (that is, half the payments were lower and half the payments were higher than the median payment).

(7) Calculation of median differences is weighted by caseload volume within MS-DRG. Differences are significant at p </= 0.05

(8) Adapted from www.cms.hhs.gov/acuteinpatientpps/02_stepspps.asp

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Molly Sandvig, JD

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SOURCE Physician Hospitals of America


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