Trends in Elderly Hospitalization and Readmission Rates for a Geographically Defined Population: Pre‐ and Post‐Prospective Payment

To address the paucity of patient‐level data regarding the effectiveness of Medicare's prospective payment system (PPS), we conducted a population‐based study of inpatient hospitalizations among individually identified elderly residents of Olmsted County, Minnesota, 1970–1987. A 4.3% increase in total days of care/1000 population from 2,652/1,000 in 1970 to 2,766/1,000 in 1980 was followed by a 9.8% decline from 1980 to 1987 (2,495/1,000). The decline was due primarily to a 13.4% decrease in mean length stay (9.7 days in 1980 to 8.4 days in 1987). The number of hospitalizations/1,000 Olmsted County elderly in 1980 was already below 1987 U.S. figures and did not exhibit the decline evidenced nationally between 1980 and 1987. A 4.6% decline in the proportion of county residents age 65–74 years who were hospitalized (174/1,000 in 1980 to 166/1,000 in 1987) was offset by an 8.3% increase for persons age ≥ 75 (252/1,000 to 273/1,000) and by a 5.7% increase in the number of hospitalizations per individual hospitalized for persons age 65–74 years (1.34 to 1.42). Using a time‐dependent Cox model, which adjusted for differences in patient characteristics between years, there was a significantly higher risk of readmission within 14 days in 1987 vs 1980 (hazard ratio (HR) = 1.33, 95% confidence interval (CI) = 1.05–1.70). The difference between years was no longer evident at 30 or 60 days (HR = 0.84, 95% CI = 0.63–1.11 between 15 and 30 days; HR = 1.12, 95% CI = 0.84–1.49 between 31 and 60 days). This study suggests that initial effects of PPS on utilization may be temporary and that more research is needed to appreciate the impact of cost‐containment on patient outcome. 1991 The American Geriatrics Society