Table 3. Logistic regression results for likelihood of transfer of Medicare patients as a function of profitability of diagnosis-related group (DRG), by specification: United States, 1984 and 1985.

Year and specification	Coefficient	t-value
1984, PPS year 1
Profitability as continuous variable:
Intercept	−4.53	−119
Profitability of DRG in 1984 in dollars	.000234	11.7
Dummy variable for positive profit:
Intercept	−7.02	−18.6
Variable = 1 if profitability positive	2.61	6.9
1985, PPS year 2
Profitability as continuous variable:
Intercept	−4.27	−112
Profitability of DRG in 1984 in dollars	.000111	5.1
Dummy variable for positive profit:
Intercept	−6.18	−18.9
Variable = 1 if profitability positive	1.97	6.0

NOTES: The dependent variable is a dummy variable for discharge to a short-stay hospital (transfer). PPS year 1 is the first year of implementation of the prospective payment system at the hospital level. For a hospital whose fiscal year begins on Oct. 1, 1983, it is Oct. 1, 1983, through Sept. 30, 1984. For a hospital whose fiscal year begins on July 1, 1984, it is July 1, 1984, through June 30, 1985. PPS year 2 is the second year after implementation (defined similary). Data from waiver States are excluded. Figures are based on a 5-percent sample of cases.

SOURCE: Health Care Financing Administration, Bureau of Data Management and Strategy: Data from the Medicare Provider Analysis and Review (MEDPAR) file and Medicare cost reports.