Psychiatry under prospective payment: experience in the first year

The authors present data on changes in resource use by Medicare psychiatric patients in general hospitals after the introduction of the prospective payment system in 1984. Length of stay and charges per discharge during fiscal year 1984 fell 13.8% and 15.9%, respectively, after the new system began, even though 31.8% of the discharges for Medicare psychiatric cases were from exempt psychiatric units. The decrease in length of stay was considerably larger (23.2%) in hospitals with no psychiatric units, which were not exempt from prospective payment.