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We re-abstracted a nationally representative sample of 7,887 Medicare charts to determine how much of the change in Medicare's Case Mix Index between 1986 and 1987 was true change in the complexity of cases and how much was upcoding or 'DRG creep'. About two-thirds of the change is true. Most of the remaining third is attributable to a general change in the(More)
Flat capitation (uniform prospective payments) makes enrolling healthy enrollees profitable to health plans. Plans with relatively generous benefits may attract the sick and fail through a premium spiral. We simulate a model of idealized managed competition to explore the effect on market performance of alternatives to flat capitation such as(More)
The clinically detailed risk information system for cost (CD-RISC) contains definitions for several hundred severity-adjusted conditions that can be used to predict future health care costs. We develop a prospective Medicare CD-RISC model using a 5-percent sample of Medicare beneficiaries and data that contain 1996 diagnostic information and 1997 annualized(More)
Medicare paid hospitals a higher amount per admission in 1984 than had been planned because the case-mix index (CMI), which reflects the proportion of patients in high-weighted DRG's versus low-weighted ones, increased more than had been projected. This study estimated the degree to which the increase in the CMI from 1981 reflected medical practice changes,(More)
The authors discuss a system that describes the resources needed to treat different subgroups of the population under age 65, based on burden of disease. It is based on 173 conditions, each with up to 3 severity levels, and contains models that combine prospective diagnoses with retrospectively determined elements. We used data from four different payers(More)
The diagnosis-related group weights that determine prices for Medicare hospital stays are recalibrated annually using charge data. Using data from fiscal years 1985 through 1987, the authors show that differences between these charge-based weights and cost-based weights are increasing only slightly. Charge-based weights are available in a more timely manner(More)
As part of the prospective payment system, the government pays 'outlier' payments for especially long or expensive cases. These payments can be viewed as insurance for the hospital against excessive losses. They mitigate problems of access and underprovision of care for the sickest patients, and provide additional payments to the hospitals that take care of(More)