Shifting Medicare Patients Out of the Hospital

Prologue: Medicare's prospective payment system (PPS) created incentives for the early discharge of hospitalized patients to subacute care: skilled nursing and intermediate care facilities, home health agencies, and long-term care hospitals. This study by Michael Morrisey, Frank Sloan, and Joseph Valvona examines changes in the proportion of patients transferred, the length-of-stay prior to transfer, and mean case-mix complexity of transferred patients. Their conclusions raise a number of issues for health policy and health care management Morrisey holds a doctorate in economics from the University of Washington. He was recently promoted to a full professorship in the Department of Health Care Organization at the University of Alabama's School of Public Health. Before joining the Alabama faculty in Birmingham three years ago, Morrisey worked for six years as a senior economist at the American Hospital Association's Hospital Research and Educational Trust (HRET). Other recent research pursuits include a study of employers' behavior in relation to their oft-discussed concern over rising medical care costs (The Milbank Quarterly, Winter 1987), which examined health insurance benefits based on data collected by the Bureau of Labor Statistics. Sloan is the Centennial Professor of Economics and chairman of the Department of Economics at Vanderbilt University. Sloan, who holds a doctorate in economics from Harvard University, also directs Vanderbilt's Health Policy Center. Valvona holds a position in corporate planning at the Vanderbilt Medical Center. He received a bachelor of science degree in biology from Emory University, a master of science degree in genetics from the University of Arizona, and a master of business administration degree in finance from Vanderbilt.