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.