Changes in Hospital Service Mix and Cost Allocations in Response to Changes in Medicae Reimbursement Schemes
By Leslie Eldenburg, Sanjay Kallapur
Journal of Accounting and Economics | May 1997
DOI
http://www.sciencedirect.com/science/article/B6V87-3SWXN31-4/2/2095f42a1414461bb23ef3856ed0376f
Citation
Eldenburg, Leslie., Kallapur, Sanjay. Changes in Hospital Service Mix and Cost Allocations in Response to Changes in Medicae Reimbursement Schemes Journal of Accounting and Economics http://www.sciencedirect.com/science/article/B6V87-3SWXN31-4/2/2095f42a1414461bb23ef3856ed0376f.
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Journal of Accounting and Economics, 1997
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Abstract
This paper tests whether cost allocations are manipulated in response to cost-plus reimbursement. After 1983, Medicare started reimbursing hospitals for inpatient services on the basis of rates set prospectively, but continued to reimburse outpatient services based on cost. Using data from Washington State, we find that hospitals responded by increasing outpatient services to Medicare patients -- the ratio of Medicare outpatient revenues as a percentage of total Medicare revenues increased after 1983 to a significantly greater extent than for non-Medicare patients. We also find that allocations of common costs to outpatient departments after 1983 significantly exceeded those to inpatient departments, compared to the allocation pattern prior to 1983. These results are robust to alternative controls and cost function specifications.

Sanjay Kallapur is a Professor of Accounting at the Indian School of Business (ISB). He joined ISB in 2005 from the Krannert School of Management, Purdue University, where he was a tenured Associate Professor.

Professor Kallapur conducts research on financial and managerial accounting, auditing, corporate governance, and risk management. He has published in each of the top three accounting journals, and his papers have been cited over 4,000 times (Google Scholar) and in regulatory policy documents in India and the UK. The American Accounting Association recently published his monograph on scientific inference in accounting research, beyond the use of p-values.

He is the founding Editor-in-Chief of Accounting Theory and Practice, a research journal focusing on India, published by Elsevier. He has been an editor of The Accounting Review from 2008 to 2011, the first person from outside North America to be appointed to that position.

Professor Kallapur is a member of National Financial Reporting Authority (NFRA), the regulatory body overseeing the accounting and auditing of listed companies in India. He is an independent director on the Board of IDBI Bank, where he serves on the risk management and audit committees. He previously served on the Board of the Life Insurance Corporation of India.

Professor Kallapur has held positions as Associate Dean and Deputy Dean for almost a decade at ISB. He started the PhD-equivalent Fellow Programme in Management at ISB and has placed his students in faculty positions at the London School of Economics, IESEG Paris, Aalto University, University of Queensland, University of Western Australia, and IIM Udaipur.

Professor Kallapur has a PhD in Business Economics from Harvard Business School, and B.Com. and M.M.S. degrees from Mumbai University. He is professionally qualified as a Fellow Member of the Institute of Cost Accountants of India (FCMA).

Sanjay Kallapur
Sanjay Kallapur