Trends and regional variations in hospital utilization and quality during the first two years of the prospective payment system.

The Commission on Professional and Hospital Activities monitored both Medicare and non-Medicare hospital discharges for a cohort of 646 U.S. nonfederal, short-term general hospitals from nonwaivered states over the period 1980-1985. Using this data base and a linear forecasting model, we studied utilization and quality-of-care trends for the years preceding implementation of the prospective payment system (PPS) and the two years following its implementation. We found that Medicare discharges declined significantly in both 1984 and 1985, length of stay was unchanged from 1984 to 1985 (except in the West, where further declines occurred), and skilled nursing facility and home health care use for postdischarge care increased both years. Our unadjusted measures of quality showed no adverse effects in either 1984 or 1985 for Medicare patients.