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Table 4 shows that the differences between HSRV and standard weights in each DRG translate into only modest differences between the CMIs that each hospital would experience under HSRV and standard weights.
The first column shows that HSRV weights increase the CMI for a large majority of hospitals.
Perhaps surprisingly, the standardization factor is negatively correlated with the hospital's loss under HSRV. The hospitals that would lose under HSRV already have their own charges heavily discounted by the standard method.
Is there something specific about the case mix of the small number of losing hospitals that leads them to lose case weight and therefore payment under HSRV? The answer turns out to be clearly yes, at least for the vast majority of losing hospitals.
Further, 83.1 percent of the hospitals that lost case weight under HSRV engaged in cardiac surgery in these very expensive DRGs, compared with only 5.0 percent of other hospitals.
The loss in case mix under HSRV occurs because this difference in case mix is combined with charges for cases that are much higher than average in more typical DRGs in the losing hospitals.
Interestingly, the hospitals that lose under HSRV do not charge more than would be expected for their expensive cardiac surgery cases.
The finding that the hospitals that lose under HSRV charge more than expected for their typical cases but not for their expensive cardiac surgery cases is consistent with these hospitals subsidizing very expensive services with excess revenue from less expensive services.
Using the HSRV weights, charges are higher than expected in the group of low-weight DRGs in 71 percent of all hospitals.
Table 7 shows that the apparent cross-subsidization was not limited to any one segment of the CMI distribution and does not determine whether hospitals would win or lose under HSRV. Table 7 does, however, illuminate the causes of the variation among "other" hospitals in the change in CMI under the HSRV method.
Under the HSRV method, the CMIs are more compressed than under the standard method.
Similarly, because of measurement error in the CMI when a sample of cases is used, the HSRV CMIs, if calculated on a full sample, are probably more compressed than the regression in Table 8 indicates.
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