Hospital Admissions, Length of Stay, and Case-Mix Impacts of Per Case Payment

Maryland has simultaneously operated per case - and per service hospital payment systems since 1976 with varying levels of stringency in setting per case rates. Regression analyses of this experience are used to compare the impacts of these systems on admissions, length of stay, and case-mix costliness for the period July 1, 1976 to June 30, 1981. Our results indicate a positive effect on admissions and negative effects on case-mix and length of stay for the per case payment approach relative to the per service approach. More stringent levels of per case payment are associated with stronger utilization responses.