Health Care Costs and Financing

Costs of rehabilitative care can be reduced to reimbursement levels with little effect on patient function

Deborah G. Dobrez, Ph.D., of the University of Illinois at Chicago, and her colleagues retrospectively estimated the difference between costs and expected reimbursements under the prospective payment system (PPS) for rehabilitation care for stroke patients on their first admission to an urban rehabilitation hospital between 1994 and 1998. The researchers found that PPS reimbursements would have been $10,825 (37 percent) lower than costs.

Among other cost-reduction strategies (for example, use of clinical pathways), a reduction in mean length of stay of at least 9.6 days would have been required to reduce costs to the level of PPS reimbursement. Patients' cognitive function at discharge would have been reduced by only 1.1 points. Use of group therapy in place of some individual therapy could bring costs close to PPS reimbursement and improve cognitive function at discharge by 0.5 points.

Thus, facilities do have options that reduce costs, some with little effect on function at discharge, according to Dr. Dobrez and her colleagues. Their work was supported in part by the Agency for Healthcare Research and Quality (HS10375).

See "The effect of prospective payment on rehabilitative care," by Dr. Dobrez, Anthony T. Lo Sasso, Ph.D., and Allen W. Heinemann, Ph.D., in the December 2004 Archives of Physical Medicine and Rehabilitation 85, pp. 1909-1914.

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