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Congressional and Veterans Affairs (VA) leaders have recommended the VA become more of a purchaser than a provider of health care. Fee-for-service Medicare provides an example of how purchased care differs from the VA's directly provided care. Using established indicators of overly intensive end-of-life care, we compared the quality of care provided through the two systems to veterans dying of cancer in fiscal years 2010-14. The Medicare-reliant veterans were significantly more likely to receive high-intensity care, in the form of chemotherapy, hospital stays, admission to the intensive care unit, more days spent in the hospital, and death in the hospital. However, they were significantly less likely than VA-reliant patients to have multiple emergency department visits. Higher-intensity end-of-life care may be driven by financial incentives present in fee-for-service Medicare but not in the VA's integrated system. To avoid putting VA-reliant veterans at risk of receiving lower-quality care, VA care-purchasing programs should develop coordination and quality monitoring programs to guard against overly intensive end-of-life care.

Long-term care hospitals are postacute care facilities for patients requiring extended hospital-level care. These facilities are reimbursed by Medicare under a prospective payment system with a short-stay outlier policy, which results in substantially lower payments for patients discharged before a diagnosis-related group-specific short-stay threshold. Using Medicare data, we examined the impact of the short-stay policy on lengths-of-stay and Medicare reimbursement among patients in long-term care hospitals who require prolonged mechanical ventilation. After accounting for case-mix and facility-level differences, we found that discharges for reasons other than death in the period 2005-10 were most likely to occur on the day of or immediately after the short-stay threshold; this held true regardless of facility ownership. In contrast, live discharges in 2002—the year before the prospective payment system started phasing out cost-based payment—were evenly distributed around the day that later became the short-stay threshold. Our findings confirm that the short-stay outlier payment policy created a strong financial incentive for long-term care hospitals to time patient discharges to maximize Medicare reimbursement. The results suggest that the new very-short-stay policy implemented in December 2012 could have a similar effect., (Project HOPE—The People-to-People Health Foundation, Inc.)

Safety-net hospitals rely on disproportionate-share hospital (DSH) payments to help cover uncompensated care costs and underpayments by Medicaid (known as Medicaid shortfalls). The Affordable Care Act (ACA) anticipates that insurance expansion will increase safety-net hospitals' revenues and will reduce DSH payments accordingly. We examined the impact of the ACA's Medicaid DSH reductions on California public hospitals' financial stability by estimating how total DSH costs (uncompensated care costs and Medicaid shortfalls) will change as a result of insurance expansion and the offsetting DSH reductions. Decreases in uncompensated care costs resulting from the ACA insurance expansion may not match the act's DSH reductions because of the high number of people who will remain uninsured, low Medicaid reimbursement rates, and medical cost inflation. Taking these three factors into account, we estimate that California public hospitals' total DSH costs will increase from $2.044 billion in 2010 to $2.363-$2.503 billion in 2019, with unmet DSH costs of $1.381-$1.537 billion., (Project HOPE—The People-to-People Health Foundation, Inc.)