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Prospective payment: the next big policy disappointment?

Health Affairs, 1984, Vol.3 (3), p.102-107 [Peer Reviewed Journal]

Copyright The People to People Health Foundation, Inc., Project HOPE Fall 1984 ;ISSN: 0278-2715 ;EISSN: 2694-233X ;EISSN: 1544-5208 ;DOI: 10.1377/hlthaff.3.3.102 ;PMID: 6440843

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Title:
Prospective payment: the next big policy disappointment?
Author: Aaron, H J
Subjects: Centers for Medicare and Medicaid Services (U.S.) ; Cost control ; Cost shifting ; Costs and Cost Analysis ; Diagnosis related groups ; DRGs ; Equipment costs ; Expenditures ; Fees & charges ; Fees and charges ; Fees, charges, etc ; Health care expenditures ; Health care policy ; Health insurance ; Health Policy ; Health services ; Hospital costs ; Hospitals ; Incentives ; Inflation ; Legislatures ; Medicare ; Medicare - economics ; Patients ; Payment ; Physicians ; Prices ; Problems ; Prospective Payment System ; Public relations ; Regulation ; Reimbursement ; Reimbursement Mechanisms ; Services ; Taxation ; United States
Is Part Of: Health Affairs, 1984, Vol.3 (3), p.102-107
Description: According to congressional mandate, DRGs for the period through 1986 are to save no more and no less than Congress stipulated in the Tax Equity and Fiscal Responsibility Act of 1982. The change in the real cost per admission, Pa, in turn, is equal to the change in the relative price of hospital inputs, Pr, multiplied by change in the quantity of inputs (labor, materials, and equipment) used per admission, I. The rate of increase of real hospital costs, therefore, is approximately equal to the sum of the rate of increase in admissions, inputs per admission, and inflation in the cost of hospital inputs beyond the general rate of inflation, or C = A +Pr+ I. The Problem With The Solution The fundamental shortcoming of the DRG system is that it deals only with I, or change in the quantity of inputs per admission. [...]charges for particular procedures may be only tenuously related to the costs actually associated with them. [...]it creates incentives adverse to its own objectives of cost control and the efficient delivery of medical services.
Publisher: United States: The People to People Health Foundation, Inc., Project HOPE
Language: English
Identifier: ISSN: 0278-2715
EISSN: 2694-233X
EISSN: 1544-5208
DOI: 10.1377/hlthaff.3.3.102
PMID: 6440843
Source: MEDLINE
ProQuest Central

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Prospective payment: the next big policy disappointment?

Copyright The People to People Health Foundation, Inc., Project HOPE Fall 1984 ;ISSN: 0278-2715 ;EISSN: 2694-233X ;EISSN: 1544-5208 ;DOI: 10.1377/hlthaff.3.3.102 ;PMID: 6440843

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