The Balanced Budget Act of 1997 and U.S. Hospital Operations
The Balanced Budget Act (BBA) of 1997 initiated several changes to Medicare payment policy in an effort to slow the growth of hospital Medicare payments and ensure the future of the Medicare Hospital Insurance Trust Fund. Although subsequent federal legislation relaxed some original proposals, resto...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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SAGE Publishing
2004-11-01
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| Series: | Inquiry: The Journal of Health Care Organization, Provision, and Financing |
| Online Access: | https://doi.org/10.5034/inquiryjrnl_41.4.401 |
| _version_ | 1818176333656621056 |
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| author | Gloria J. Bazzoli Richard C. Lindrooth Romana Hasnain-Wynia Jack Needleman |
| author_facet | Gloria J. Bazzoli Richard C. Lindrooth Romana Hasnain-Wynia Jack Needleman |
| author_sort | Gloria J. Bazzoli |
| collection | DOAJ |
| description | The Balanced Budget Act (BBA) of 1997 initiated several changes to Medicare payment policy in an effort to slow the growth of hospital Medicare payments and ensure the future of the Medicare Hospital Insurance Trust Fund. Although subsequent federal legislation relaxed some original proposals, restored funds were limited and directed to specific types of hospitals. In addition, these Medicare policy changes came at a time when hospitals faced private sector payment constraints. This paper assesses the short-term effects of the BBA on operations of nonprofit hospitals in the United States and compares these effects to those observed in the early 1980s during implementation of the Medicare prospective payment system (PPS). We found that some operational changes instituted by hospitals facing financial pressures from the BBA were similar to those observed for hospitals that faced pressure from Medicare PPS, including efforts to contain Medicare cost growth, to expand outpatient service provision, and to contain hospital staffing. However, during PPS implementation hospitals experienced declining inpatient use and growing profit margins, whereas post-BBA hospitals experienced growing inpatient use and declining margins. |
| first_indexed | 2024-12-11T20:14:32Z |
| format | Article |
| id | doaj.art-0380c4efd3e644cb88c4b706f40c03ee |
| institution | Directory Open Access Journal |
| issn | 0046-9580 |
| language | English |
| last_indexed | 2024-12-11T20:14:32Z |
| publishDate | 2004-11-01 |
| publisher | SAGE Publishing |
| record_format | Article |
| series | Inquiry: The Journal of Health Care Organization, Provision, and Financing |
| spelling | doaj.art-0380c4efd3e644cb88c4b706f40c03ee2022-12-22T00:52:13ZengSAGE PublishingInquiry: The Journal of Health Care Organization, Provision, and Financing0046-95802004-11-014110.5034/inquiryjrnl_41.4.401The Balanced Budget Act of 1997 and U.S. Hospital OperationsGloria J. BazzoliRichard C. LindroothRomana Hasnain-WyniaJack NeedlemanThe Balanced Budget Act (BBA) of 1997 initiated several changes to Medicare payment policy in an effort to slow the growth of hospital Medicare payments and ensure the future of the Medicare Hospital Insurance Trust Fund. Although subsequent federal legislation relaxed some original proposals, restored funds were limited and directed to specific types of hospitals. In addition, these Medicare policy changes came at a time when hospitals faced private sector payment constraints. This paper assesses the short-term effects of the BBA on operations of nonprofit hospitals in the United States and compares these effects to those observed in the early 1980s during implementation of the Medicare prospective payment system (PPS). We found that some operational changes instituted by hospitals facing financial pressures from the BBA were similar to those observed for hospitals that faced pressure from Medicare PPS, including efforts to contain Medicare cost growth, to expand outpatient service provision, and to contain hospital staffing. However, during PPS implementation hospitals experienced declining inpatient use and growing profit margins, whereas post-BBA hospitals experienced growing inpatient use and declining margins.https://doi.org/10.5034/inquiryjrnl_41.4.401 |
| spellingShingle | Gloria J. Bazzoli Richard C. Lindrooth Romana Hasnain-Wynia Jack Needleman The Balanced Budget Act of 1997 and U.S. Hospital Operations Inquiry: The Journal of Health Care Organization, Provision, and Financing |
| title | The Balanced Budget Act of 1997 and U.S. Hospital Operations |
| title_full | The Balanced Budget Act of 1997 and U.S. Hospital Operations |
| title_fullStr | The Balanced Budget Act of 1997 and U.S. Hospital Operations |
| title_full_unstemmed | The Balanced Budget Act of 1997 and U.S. Hospital Operations |
| title_short | The Balanced Budget Act of 1997 and U.S. Hospital Operations |
| title_sort | balanced budget act of 1997 and u s hospital operations |
| url | https://doi.org/10.5034/inquiryjrnl_41.4.401 |
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