Over 25% of the elderly reside in rural areas. Elders residing in rura
l areas have incomes that are approximately 20% less than their urban
counterparts. One year of data on the 1,972 admissions of Medicare pat
ients to a 150-bed rural hospital was studied to seek the commonalties
marking four LOS categories of patients, including their 17+ day LOS
outliers. Sixteen percent of all the Medicare admissions who tended to
be older. have chronic illnesses and needed multiple services, fell i
nto the 17+ day LOS group where reimbursement covered only one-third o
f the actual cost of care provided. ICD-9 codes associated with the ca
rdiac diagnostic category dominated, with 21.5% of those included in t
his resource-intensive group. In preparing for capitated reimbursement
, all efforts to develop systems to decrease ED visits and hospital st
ays, while enhancing quality of life for the chronically ill, must be
implemented.