The use of hospital care: do insurance status, prospective payment, and the unit of payments make a difference?

Limited to 251,768 discharges during 1999 from short-term hospitals located in Oklahoma, the objective of this study was to examine the influence of insurance status, prospective payment, and the unit of payment on variation in the length of stay. The regression analysis indicated that elderly patients whose care was financed by the Medicare pricing system and the uninsured experienced a significantly shorter episode of hospitalization than their commercially insured counterparts. Conversely, Medicaid recipients, whose care was financed by a fixed per diem and uninsured or self-responsible patients, experienced a significantly shorter hospital stay than the commercially insured. The results also indicate that the type and source of admissions, the discharge destination of the patient, and case complexity significantly influenced the hospital stay. African-Americans and Native Americans also experienced a longer episode of hospital care than their white counterparts. The article concludes with a discussion of policy implications and the need to develop alternate methods of financing hospital care thereby reducing the risks of premature discharge and iatrogenic injury.