Occupational adjustment of the prospective payment system wage index.
Pope, Gregory C
Date of Pub
In this article, the bias in the Medicare prospective payment system (PPS) hospital wage index that results from its failure
to hold hospital occupation mix constant is examined. On average, the difference between the current PPS wage index and a
fixed-occupation-mix Laspeyres index is small, approximately 2 percent. However, occupation-mix distortions are substantially
larger for a small proportion of labor market areas, especially some in the South. Biases in the wage index resulting from
its failure to appropriately account for labor substitution and intra-occupational worker characteristics are also analyzed
but are not found to be significant.
Abstracting and Indexing : Catchment Area (Health)/economics : Comparative Study : Data Collection : Health Occupations/economics
: Medicare/statistics & numerical data : Models, Statistical : Personnel, Hospital/economics : Prospective Payment System/statistics
& numerical data : Salaries and Fringe Benefits/statistics & numerical data : United States