Impact of Postdischarge Follow-Up Care on Medicare Expenditures: Does Rural Make a Difference?

Reducing postdischarge Medicare expenditures is a key focus for hospitals. Early follow-up care is an important piece of this focus, but it is unclear whether there are rural-urban differences in the impact of follow-up care on Medicare expenditures. To assess this difference, we use the Medicare Current Beneficiary Survey, Cost and Use Files, 2000-2010. We conduct a retrospective analysis of 30-day postdischarge Medicare expenditures using two-stage residual inclusion with a quantile regression, where the receipt of 7-day follow-up care was the main independent variable. Postdischarge follow-up care increased the 25th percentile of 30-day expenditures, decreased the 75th percentile, and there were no rural-urban differences. Partial effects show postdischarge follow-up care resulted in higher 30-day expenditures among low-cost rural beneficiaries. Ensuring early follow-up care for high-cost beneficiaries may be advantageous to both rural and urban providers in helping reduce postdischarge Medicare expenditures.