To examine the long‐term impact of edicare payment reductions on patient outcomes for edicare acute myocardial infarction () patients.
Analysis of secondary data compiled from 100 percent edicare rovider nalysis and eview between 1995 and 2005, edicare hospital cost reports, npatient rospective ayment ystem ayment mpact iles, merican ospital ssociation annual surveys, ntertudy, rea esource iles, and ounty usiness atterns.
We used a natural experiment—the alanced udget ct () of 1997—as an instrument to predict cumulative edicare revenue loss due solely to the , and basing on the predicted loss categorized hospitals into small, moderate, or large payment‐cut groups and followed edicare patient outcomes in these hospitals over an 11‐year panel between 1995 and 2005.
We found that while edicare mortality trends remained similar across hospitals between pre‐ and initial‐ periods, hospitals facing large payment cuts saw smaller improvement in mortality rates relative to that of hospitals facing small cuts in the post‐ period. Part of the relatively higher mortalities among large‐cut hospitals might be related to reductions in staffing levels and operating costs, and a small part might be due to patient selection.
We found evidence that hospitals facing large edicare payment cuts as a result of of 1997 were associated with deteriorating patient outcomes in the long run. Medicare payment reductions may have an unintended consequence of widening the gap in quality across hospitals.