THE OWNERSHIP DIFFERENCE IN RELATIVE PERFORMANCE OF REHABILITATION SPECIALTY HOSPITALS

Despite the rapid growth in the number of rehabilitation specialty hos pitals in recent years, there is little knowledge of the performance o f these facilities, The recent growth in the number of for-profit reha bilitation providers and increasing competition among for-profit and n ot-for-profit rehabilitation hospitals have raised questions about dif ferences in performance, This study analyzed differences in financial and operational performance between for-profit rehabilitation specialt y hospitals and not-for-profit rehabilitation specialty hospitals for fiscal years ending in 1989 through 1992, Because rehabilitation hospi tals are exempted from Medicare's Prospective Payment System, but subj ect to cast limits established under the Tax Equity and Fiscal Respons ibility Act of 1982 (TEFRA), this study controlled for the influence o f TEFRA by grouping hospitals into ''new'' and ''existing'' categories , The findings show significantly higher net revenue and profits in ex isting for-profit rehabilitation hospitals, In addition, existing for- profit rehabilitation facilities served a larger percentage of Medicar e patients and had fewer employees than existing not-for-profit facili ties, It was concluded that existing for-profit rehabilitation hospita ls maximized their charges to increase their revenues, These findings have important policy implications for reimbursement alternatives unde r consideration for inpatient rehabilitation programs. (C) 1995 by the American Congress of Rehabilitation Medicine and the American Academy of Physical Medicine and Rehabilitation