TY - JOUR
T1 - Can amputation save the hospital? The impact of the Medicare Rural Flexibility Program on demand and welfare
AU - Gowrisankaran, Gautam
AU - Lucarelli, Claudio
AU - Schmidt-Dengler, Philipp
AU - Town, Robert
N1 - Publisher Copyright:
© 2018 Elsevier B.V.
PY - 2018/3
Y1 - 2018/3
N2 - This paper seeks to understand the impact of the Medicare Rural Hospital Flexibility (Flex) Program on hospital choice and consumer welfare for rural residents. The Flex Program created a new class of hospital, the Critical Access Hospital (CAH), which receives more generous Medicare reimbursements in return for limits on capacity and length of stay. We find that conversion to CAH status resulted in a 4.7 percent drop in inpatient admissions to participating hospitals, almost all of which was driven by factors other than capacity constraints. The Flex Program increased consumer welfare if it prevented the exit of at least 6.5 percent of randomly selected converting hospitals.
AB - This paper seeks to understand the impact of the Medicare Rural Hospital Flexibility (Flex) Program on hospital choice and consumer welfare for rural residents. The Flex Program created a new class of hospital, the Critical Access Hospital (CAH), which receives more generous Medicare reimbursements in return for limits on capacity and length of stay. We find that conversion to CAH status resulted in a 4.7 percent drop in inpatient admissions to participating hospitals, almost all of which was driven by factors other than capacity constraints. The Flex Program increased consumer welfare if it prevented the exit of at least 6.5 percent of randomly selected converting hospitals.
KW - Hospital choice
KW - Medicare
KW - Patient welfare
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U2 - 10.1016/j.jhealeco.2018.01.004
DO - 10.1016/j.jhealeco.2018.01.004
M3 - Article
C2 - 29477951
AN - SCOPUS:85042353605
SN - 0167-6296
VL - 58
SP - 110
EP - 122
JO - Journal of Health Economics
JF - Journal of Health Economics
ER -