| This study examined the relationship between the adaptation of hospital accounting systems to Medicare's hospital reimbursement system and the achievement of organizational objectives. The objectives of this investigation were to examine whether hospitals adapted their cost accounting systems in response to the mandated change in their revenue function, and to examine hospitals' effectiveness in reducing length-of-stay (LOS). In addition, the study provided descriptive information for designers of hospital cost accounting systems by reporting physician, patient, and hospital variables that are correlated with LOS differences within Diagnosis Related Groups. Such variables might be relevant to include in hospital cost accounting systems.;The data show an obvious decrease in LOS for the majority of DRGs, and therefore it is concluded that the change in accounting system was appropriate. In addition, several consistent patterns among hospital, physician and patient characteristics and LOS were identified.;A positive correlation exists between LOS and hospital size. As hospital size increases, so does patient LOS. Urban hospitals also keep their patients longer than rural hospitals. The alleged shorter stays in for-profit hospitals are not substantiated; in several instances the non-profit hospitals experienced the shorter stays.;The very large and very small hospitals showed the greatest decline in LOS over the two-year period. Urban, rural, for profit and non-profit hospitals all appeared to be responding to Medicare's Prospective Payment System by shortening their patient LOS.;In this limited sample, a great deal of variation exists within a physician's practice pattern, and the average LOS differs by as much as seven days between physicians in the same hospital within a DRG. Outliers, appearing to occur randomly, were not found to be associated with specific physicians.;Three patient characteristics appear to affect LOS. The older the patient, the longer the stay is likely to be. Females nearly always outstay males by approximately one-half day, and emergency admissions consistently result in lengthier stays. |
