TY  - JOUR
AU  - Eliason, Paul J
AU  - Grieco, Paul L. E
AU  - McDevitt, Ryan C
AU  - Roberts, James W
TI  - Strategic Patient Discharge: The Case of Long-Term Care Hospitals
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 22598
PY  - 2016
Y2  - September 2016
DO  - 10.3386/w22598
UR  - http://www.nber.org/papers/w22598
L1  - http://www.nber.org/papers/w22598.pdf
N1  - Author contact info:
Paul J. Eliason
Brigham Young Unviersity
Department of Economics
435 Crabtree Technology Building
Provo, UT 84602
E-Mail: pje26@byu.edu

Paul Grieco
The Pennsylvania State University
Department of Economics
509 Kern Building
University Park
Pennsylvania, PA 16802, USA
E-Mail: paul.grieco@gmail.com

Ryan C. McDevitt
Duke University, The Fuqua School of Business
Department of Economics
Durham, NC 27708
E-Mail: ryan.mcdevitt@duke.edu

James W. Roberts
Duke University
Department of Economics
213 Social Sciences Building
Durham, NC 27708
Tel: 919/660-1822
E-Mail: j.roberts@duke.edu
AB  - Medicare's prospective payment system for long-term acute-care hospitals (LTCHs) pro- vides modest reimbursements at the beginning of a patient's stay before jumping discontinuously to a large lump-sum payment after a pre-specified number of days. We show that LTCHs respond to financial incentives by disproportionately discharging patients after they cross the large-payment threshold, resulting in worse outcomes for patients. We find this occurs more often at for-profit facilities, facilities acquired by leading LTCH chains, and facilities co-located with other hospitals. Using a dynamic structural model, we evaluate counterfactual payment policies that would provide substantial savings for Medicare without adversely affecting patients.
ER  -