The impact of Medicare's Prospective Payment System on staffing of long-term acute care hospitals: the early evidence.
BACKGROUND
Long-term acute care hospitals (LTACHs) treat patients with complex medical conditions requiring hospital care for extended periods of time. In the last decade, Medicare saw spiraling costs for post-acute care settings. The Balanced Budget Act mandated the use of Prospective Payment System (PPS) for all post-acute care settings including LTACHs. Medicare shifted to PPS for LTACHs in October 2002.


OBJECTIVE
This study analyzes the early effect of Medicare's PPS on the staffing intensity of LTACHs.


METHODS
The study uses panel data of measures of hospital and market characteristics in years 2001 through 2004. The impact of the payment mechanism, market, and organizational variables on the staffing intensity of LTACHs is evaluated using fixed-effects (within-groups) regression analysis.


RESULTS
The fixed-effects regression models found that Medicare's PPS was associated with higher staffing intensity of the LTACHs in years 2003 and 2004. Market-level per capita income was significantly positively associated with staffing intensity. No secular trend in staffing intensity was found.


CONCLUSIONS
The concern that the cost containment incentives of PPS would result in lowered staffing levels of LTACHs was not borne out by this study. Further follow-up is required to assess in the longer term the effects of PPS on staffing and quality of care in LTACHs.
Nayar
Preethy
P
Department of Health Services Research & Administration, College of Public Health, University of Nebraska Medical Center, PO Box 984350, The Nebraska Medical Center, Omaha, USA. pnayar@unmc.edu
D003422:Critical Care; D008134:Long-Term Care; D006278:Medicare; D010561:Personnel Staffing and Scheduling / Q000458:organization & administration*; D011445:Prospective Payment System; D012044:Regression Analysis; D014481:United States; D000078329:Workforce