MEDICARE: Share of Hospitals' Inpatient Use and Revenue.

The GAO investigated the effects of Medicares prospective payment system PPS on the financial status of rural hospitals. Using the latest data avaialable, we computed Medicares share of total inpatient days, discharges, and revenues for 1985. The data were obtained from the cost report tapes maintained by the Health Care Financing Administration, which administers the Medicare program. This briefing report provides statistical data on 4,977 PPS hospitals nationwide and separately for 59 Arizona hospitals. The data show that Medicare is an important source of business for hospitals, representing an average 31.5 percent of revenues, 32.3 percent of discharges, and 42.0 percent of inpatient days. While the program is important to all hospitals, it is more important to rural hospitals as a source of payment, and to those rural hospitals with less than 50 beds in particular. As is the case nationwide, Medicare is important to Arizona hospitals in terms of inpatient hospital use and revenues. However, in Arizona, Medicare is slightly more important to urban hospitals that to rural hospitals.