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The End of Hospital Cost Shifting and the Quest for Hospital Productivity

Austin B. Frakt

Although perennially relevant, investigation of the effect of Medicare hospital payment changes on hospital and health system performance has heightened salience today. The 2010 Patient Protection and Affordable Care Act (Public Law 111–148; hereafter, ACA) will permanently reduce the Medicare payments hospitals would otherwise receive. Its “productivity adjustment” will scale payments downward by the average rate at which private nonfarm businesses' productivity increases.

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