By Sean Nicholson
This examine reports the rationales, legislative historical past, and monetary incentives of either forms of health center subsidies.
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Additional info for Medicare Hospital Subsidies: Money in Search of a Purpose
If Medicare’s total hospital expenditures were essentially capped, then this increase in IME payments was implicitly funded by nonteaching hospitals, which were receiving smaller DRG payment increases than they would have if the IME policy was designed so that expenditures were fixed. IME expenditures increased by $3 billion in real terms between 1987 and 1997. If the government wanted this to occur, it should have legislated this increase rather than allowing the decisions of teaching hospitals and an open-ended IME policy to dictate the increase.
S. hospitals. Recent Legislative Revisions to the IME and DME Programs The graduate medical education payment formulas have been revised several times since 1983. In 1985 HCFA instituted the Medicare disproportionate share (DSH) program, described in chapter 3. 405. 405 coefficient was still doubled to prevent teaching hospitals from losing too much money under the new DRG payment system. 405 - 1]. The 2 in the formula expresses Congress’s desire to double the regression coefficient. 405 -1]. 5 Recall that DME payments depend on a hospital’s direct cost of training residents in 1984, updated to the current year using the consumer price index.
These hospitals might also restrict access for Medicare (and other) patients who could not fully cover the cost of their care. The Health Care Financing Administration determined that no special adjustments were required in either 1984 or 1985 for 25 26 MEDICARE HOSPITAL SUBSIDIES hospitals treating a disproportionate share of Medicaid and poor Medicare patients, based on analysis of hospital costs from 1980. The quantity of low-income patients and Medicare patients did not substantially affect a hospital’s cost per Medicare patient once the following hospital characteristics were accounted for: geographic location (urban/rural), patients’ case-mix index, number of beds, teaching intensity (resident-to-bed ratio), market wages, ownership, proportion of patients by income category, proportion of patients by payer type, and proportion of nonwhite patients (ProPAC 1985, Technical Appendixes).