Changes in hospital service mix and cost allocations in response to changes in Medicare reimbursement schemes

Eldenburg, L and Kallapur, S (1997) Changes in hospital service mix and cost allocations in response to changes in Medicare reimbursement schemes. Journal of Accounting and Economics, 23 (1). 31 - 51.

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Abstract

After 1983, Medicare paid hospitals for inpatient services at fixed rates, but continued to reimburse outpatient services based on reported cost. Using data from Washington State we find that hospitals responded by increasing outpatient services to Medicare patients compared to non-Medicare patients-the ratio of Medicare outpatient revenues as a percentage of total Medicare revenues increased after 1983 to a significantly greater extent than for non-Medicare patients. We also find that allocations of overhead costs to outpatient departments increased after 1983. These findings suggest that hospitals change their patient mix and cost allocations to maximize hospital cash flows.

Affiliation: Indian School of Business
ISB Creators:
ISB CreatorsORCiD
Kallapur, Shttps://orcid.org/0000-0003-2920-6144
Item Type: Article
Additional Information: The research article was published by the author with the affiliation of The Hong Kong University of Science & Technology
Uncontrolled Keywords: Cost allocation, Reimbursement schemes, Patient mix
Subjects: Business and Management
Depositing User: Veeramani R
Date Deposited: 06 Mar 2019 08:44
Last Modified: 13 Mar 2019 09:31
URI: http://eprints.exchange.isb.edu/id/eprint/669
Publisher URL: https://doi.org/10.1016/S0165-4101(96)00447-8
Publisher OA policy: http://www.sherpa.ac.uk/romeo/issn/0165-4101/
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