Assessing the Viability of All-Payer Systems for Inpatient Hospital Services

This report explores the feasibility and possible structure of alternative approaches to developing an all-payer prospective system for reimbursing hospitals for inpatient care. Included are a discussion of the derivation of case mix indexes, a discussion on constructing estimates of the average cost of an inpatient discharge, and a discussion on achieving Medicare savings. Also covered is a payment simulation model that covers average payments per discharge by hospital type, aggregate payments by hospital type, and distribution effects by hospital type.