Market entry and exit in long-term care: 1985-2000.

Market entry and exit of skilled nursing providers is analyzed to observe initial industry responses to Medicare prospective payment. Supply adjustments were immediate, and were stronger in urban than in rural areas. After 12 years of steady growth, widespread market expansion ceased in 1998, but net reductions in the number of facilities occurred primarily in the hospital-based sector.

Rural hospital wages and the area wage index.

We examined data on hospital hourly wages and the prospective payment system (PPS) wage index from 1990 to 1997, to determine if incremental changes to the index have improved its precision and equity as a regional cost adjuster. The differential between average rural and urban PPS hourly wages has declined by almost one-fourth over the 8-year study period. Nearly one-half of the decrease is attributable to regulatory and reporting changes in the annual hospital wage survey.