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Abstract #146762

Mustafa Younis, Chair, Dept of Health Policy, Florida International University, 11200 SW 8th St., Miaimi, FL 33199, 3043487804, younis99@gmail.com, Gwendolyn Prater, PhD, Dean college of public service, Jackson State Univesity, 350 W. Woodrow Wilson Ave, Jackson, MS 39213, and Emeka Nwagwu, PhD, Chair, Dept of Health Policy & Mgmt, Jackson State Univesity, 350 W. Woodrow Wilson Ave, Suite 2301-A, Jackson, MS 39213.

The Balanced Budget Act of 1997 (BBA) reduced the payment for service providers and reduced the subsidy paid by the government for hospitals. Since the passage of such cost containment measures, debates regarding their impact on hospitals. We examined the relationship between the BBA and hospital profitability by using return on assets to measure profitability, by running an ordinary least squares regression for 1996 as pre-BBA and 1999 as post-BBA. We controlled for variables that were not included in previous literature, such as critical access hospital, medical education. Furthermore we incorporated several economic, financial, in the model. We found that overall hospital profitability declined as a result of the introduction of the BBA; however, small rural hospitals that converted to critical access status enjoyed improvement in financial status over the period of our study. Hospitals that converted to for-profit status did not improve in financial status, and showed a lower earning after the conversation. Our results show that the BBA had a negative effect on hospitals because of cuts in its reimbursement policy, except for critical access hospitals, which show improvement because of their exemption from the prospective payment system. Our study differs from others by using national comprehensive data for years that focus exclusively on the Balanced Budget Act period. We deliberately excluded any period that might be affected by the Balanced Budget Refinement Act (BBRA) of 1999, to clarify the severity of the BBA cut on hospital financial performance.

Learning Objectives:

• Health Policy, The Balanced Budget Act , Hospitals ownership and conversations, Medicare, teaching hospitals, Regional Varations.

Keywords: Balanced Budget Act, Hospitals

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Presenting author's disclosure statement:
Organization/institution whose products or services will be discussed: na

Any relevant financial relationships? No
Any institutionally-contracted trials related to this submission?

I agree to comply with the American Public Health Association Conflict of Interest and Commercial Support Guidelines, and to disclose to the participants any off-label or experimental uses of a commercial product or service discussed in my presentation.