How Do Hospitals Cope with Sustained Slow Growth in Medicare Prices?

Wiley: 10/1/13

Objective

To estimate the effects of changes in Medicare inpatient hospital prices on hospitals’ overall revenues, operating expenses, profits, assets, and staffing.

Primary Data Source

Medicare hospital cost reports (1996–2009).

Study Design

For each hospital, we quantify the year-to-year price impacts from changes in the Medicare payment formula. We use cumulative simulated price impacts as instruments for Medicare inpatient revenues. We use a series of two-stage least squares panel data regressions to estimate the effects of changes in Medicare revenues among all hospitals, and separately among not-for-profit versus for-profit hospitals, and among hospitals experiencing real price increases (“gainers”) versus decreases (“losers”). Read more