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The Impact of Medicaid Benefit Design on Length of Hospital Stay and Patient Transfers
Richard G. Frank; Judith R. Lave
Psychiatric Services 1985; doi:
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Howard Goldman, M.D., Ph.D., and Carl A. Taube, Ph.D., served as guest editors of this special section on prospective payment for mental health services. Dr. Goldman is assistant director for mental health financing at the National Institute of Mental Health in Rockville, Maryland, and Dr. Taube is deputy director of the NIMH Division of Biometry and Epidemiology. These papers follow up a series of papers on prospective payment published in May 1984.

The authors are grateful to Randy Ellis, Lester Lave, participants in the National Institute of Mental Health economics seminar, and especially Howard Goldman for useful suggestions. Harry Sherick and Lora Portone provided computing assistance.

The Health Services Research and Development Center, Johns Hopkins University School of Hygiene and Public Health, 624 North Broadway, Baltimore, Maryland 21205

The Graduate School of Public Health at the University of Pittsburgh

1985 American Psychiatric Association

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Abstract

The authors examined how the Medicaid hospital benefit structure affects the length of stay of psychiatric inpatients and transfers to state mental hospitals and nursing homes. They hypothesized that length-of-stay and discharge patterns would depend on five classes of variables: patient characteristics, diagnosis, mental health status, hospital characteristics, and benefit structure. Analysis of 976 Medicaid cases showed that the variables together accounted for only 17 percent of the variation in patient length of stay; benefit structure alone accounted for 6 percent of the variation, slightly less than the diagnostic variables. A patient's clinical status was the most important predictor of transfer to state mental hospitals, although benefit structure had a significant effect. It had no effect on patient transfers to nursing homes. The authors discuss the implications of the findings for designing prospective payment systems for psychiatric patients under Medicare.

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