Financial impact of the Medicare prospective payment system on long term acute care hospitals

Objective. Long Term Acute Care Hospitals (LTACs) are subject to Medicare rules because they accept Medicare and Medicaid patients. In October 2002, Medicare changed the LTAC reimbursement formulas, from a cost basis system to a Prospective Payment System (PPS). This study examines whether the PPS has negatively affected the financial performance of the LTAC hospitals in the period following the reimbursement change (2003-2006), as compared to the period prior to the change (1999-2003), and if so, to what extent. This study will also examine whether the PPS has resulted in a decreased average patient length of stay (LOS) in the LTAC hospitals for the period of 2003-2006 as compared to the prior period of 1999-2003, and if so, to what extent. ^ Methods. The study group consists of two large LTAC hospital systems, Kindred Healthcare Inc. and Select Specialty Hospitals of Select Medical Corporation. Financial data and operational indicators were reviewed, tabulated and dichotomized into two groups, covering the two periods: 1999-2002 and 2003-2006. The financial data included net annual revenues, net income, revenue per patient per day and profit margins. It was hypothesized that the profit margins for the LTAC hospitals were reduced because of the new PPS. Operational indicators, such as annual admissions, annual patient days, and average LOS were analyzed. It was hypothesized that LOS for the LTAC hospitals would have decreased. Case mix index, defined as the weighted average of patients’ DRGs for each hospital system, was not available to cast more light on the direction of LOS. ^ Results. This assessment found that the negative financial impacts did not materialize; instead, financial performance improved during the PPS period (2003-2006). The income margin percentage under the PPS increased for Kindred by 24%, and for Select by 77%. Thus, the study’s working hypothesis of reduced income margins for the LTACs under the PPS was contradicted. As to the average patient length of stay, LOS decreased from 34.7 days to 29.4 days for Kindred, and from 30.5 days to 25.3 days for Select. Thus, on the issue of LTAC shorter length of stay, the study’s working hypothesis was confirmed. ^ Conclusion. Overall, there was no negative financial effect on the LTAC hospitals during the period of 2003-2006 following Medicare implementation of the PPS in October 2002. On the contrary, the income margins improved significantly. ^ During the same period, LOS decreased following the implementation of the PPS. This was consistent with the LTAC hospitals’ pursuit of financial incentives.^

Financial impact of the Medicare prospective payment system on long term acute care hospitals

Objective. Long Term Acute Care Hospitals (LTACs) are subject to Medicare rules because they accept Medicare and Medicaid patients. In October 2002, Medicare changed the LTAC reimbursement formulas, from a cost basis system to a Prospective Payment System (PPS). This study examines whether the PPS has negatively affected the financial performance of the LTAC hospitals in the period following the reimbursement change (2003–2006), as compared to the period prior to the change (1999–2003), and if so, to what extent. This study will also examine whether the PPS has resulted in a decreased average patient length of stay (LOS) in the LTAC hospitals for the period of 2003–2006 as compared to the prior period of 1999-2003, and if so, to what extent. ^ Methods. The study group consists of two large LTAC hospital systems, Kindred Healthcare Inc. and Select Specialty Hospitals of Select Medical Corporation. Financial data and operational indicators were reviewed, tabulated and dichotomized into two groups, covering the two periods: 1999–2002 and 2003–2006. The financial data included net annual revenues, net income, revenue per patient per day and profit margins. It was hypothesized that the profit margins for the LTAC hospitals were reduced because of the new PPS. Operational indicators, such as annual admissions, annual patient days, and average LOS were analyzed. It was hypothesized that LOS for the LTAC hospitals would have decreased. Case mix index, defined as the weighted average of patients’ DRGs for each hospital system, was not available to cast more light on the direction of LOS. ^ Results. This assessment found that the negative financial impacts did not materialize; instead, financial performance improved during the PPS period (2003–2006). The income margin percentage under the PPS increased for Kindred by 24%, and for Select by 77%. Thus, the study’s working hypothesis of reduced income margins for the LTACs under the PPS was contradicted. As to the average patient length of stay, LOS decreased from 34.7 days to 29.4 days for Kindred, and from 30.5 days to 25.3 days for Select. Thus, on the issue of LTAC shorter length of stay, the study’s working hypothesis was confirmed. ^ Conclusion. Overall, there was no negative financial effect on the LTAC hospitals during the period of 2003–2006 following Medicare implementation of the PPS in October 2002. On the contrary, the income margins improved significantly. ^ During the same period, LOS decreased following the implementation of the PPS. This was consistent with the LTAC hospitals’ pursuit of financial incentives. ^

Assessment of the performance of 3m 3500 organic vapor monitors over extended sampling durations

The purpose of this study was to assess the accuracy and precision of airborne volatile organic compound (VOC) concentrations measured using passive air samplers (3M 3500 organic vapor monitors) over extended sampling durations (9 and 15 days). A total of forty-five organic vapor monitor samples were collected at a State of Texas air monitoring site during two different sampling periods (July/August and November 2008). The results of this study indicate that for most of the tested compounds, there was no significant difference between long-term (9 or 15 days) sample concentrations and the means of parallel consecutive short-term (3 days) sample concentrations. Biases of 9 or 15-day measurements vs. consecutive 3-day measurements showed considerable variability. Those compounds that had percent bias values of <10% are suggested as acceptable for long-term sampling (9 and 15 days). Of the twenty-one compounds examined, 10 compounds are classified as acceptable for long-term sampling; these include m,p-xylene, 1,2,4-trimethylbenzene, n-hexane, ethylbenzene, benzene, toluene, o-xylene, d-limonene, dimethylpentane and methyl tertbutyl ether. The ratio of sampling procedure variability relative to variability within days was approximately 1.89 for both sampling periods for the 3-day vs. 9-day comparisons and approximately 2.19 for both sampling periods for the 3-day vs. 15-day comparisons. Considerably higher concentrations of most VOCs were measured during the November sampling period compared to the July/August period. These differences may be a result of varying meteorological conditions during these two time periods, e.g., the differences in wind direction, and wind speed. Further studies are suggested to further evaluate the accuracy and precision of 3M 3500 organic vapor monitors over extended sampling durations. ^

A comparison of two statistical methods for analysis of day of the week effect on births from 2005-2007 in Harris County of Texas

The pattern of the births during the week has been reported by many studies. The births occurred in weekends are found consistently less then births occurred in weekdays. This study employed two statistical methods, two-way ANOVA and two-way Friedman's test to analyse the daily variations in amount of births of 222,735 births from 2005-2007 in Harris County, Texas. The two methods were compared on their assumptions, procedures and results. Both of the tests showed a significant result which indicated that the births through the week are not uniformly distributed. The result of multiple comparison demonstrated the births occurring on weekends were significantly different than the births occurring on weekdays with least amount on Sundays.^