Rural Hospital Wages and the Area Wage Index: 1990–1997

This brief examines whether incremental changes in the hospital wage index over the previous 10 years improved the equity of the index as a regional cost adjuster. It investigates potential bias created by broad rural labor market definitions and suggests that if the index were recomputed using more precisely defined rural labor markets, Medicare payments to smallest and most vulnerable rural facilities would be reduced. The report includes figures.