Geographic classification of hospitals: alternative labor market areas.

Medicare hospital payments are adjusted to reflect variation in hospital wages across geographic areas by grouping hospitals into labor market areas. By only recognizing the average wage in an area, Medicare encourages hospitals to contain costs. Labor market area definitions have recently received renewed attention because of their impact on hospital payments. Alternative labor market areas were evaluated using several criteria, including ability to explain wage variation and impact on payment equity. Rural labor market areas can be improved using county population size; however, further research on urban labor market areas is needed.

An overview: eliminating racial, ethnic, and SES disparities in health care.

The papers featured in this issue of the Health Care Financing Review were presented at "Eliminating Racial, Ethnic, and SES Disparities in Health Care: A Research Agenda for the New Millennium." This conference was held on October 15, 1999, in the Washington, DC., area and was co-sponsored by the Health Care Financing Administration (HCFA), the Agency for Healthcare Research and Quality (AHRQ) (formerly the Agency for Health Care Policy and Research), and the Henry J. Kaiser Family Foundation. The conference was undertaken in response to the challenge posed by President Clinton's national goal of eliminating racial and ethnic disparities in six health domains by the year 2010.

A layman's guide to the U.S. health care system.

This article provides an overview of the U.S. health care system and recent proposals for health system reform. Prepared for a 15-nation comparative study for the Organization for Economic Cooperation and Development (OECD), the article summarizes descriptive data on the financing, utilization, access, and supply of U.S. health services; analyzes health system cost growth and trends; reviews health reforms adopted in the 1980s; and discusses proposals in the current health system reform debate.

Medicare prospective payment without separate urban and rural rates.

The elimination of urban-rural differences in the Medicare prospective payment system (PPS) standard rates implies a need to re-examine all the PPS payment adjustments. Refinements for case mix, outliers, and the wage index can make a significant contribution to avoiding payment disparities in a single-rate system. However, changes in the adjustments for teaching and disproportionate-share (DSH) hospitals are also needed. The typically urban location of these hospitals makes it difficult to balance PPS payments and costs among major groups of urban and rural hospitals without some form of higher payment for all hospitals located in large urban areas.