Early Experience with Prospective Payment of Hospitals

The federal government's march to nationalize hospital-payment rates under Medicare's new reimbursement mechanism — an action that is flawed by a lack of data, sharp differences among hospitals in the severity of patient illnesses, and mounting congressional concern over whether the quality of care is deteriorating under this economic incentive — is nevertheless moving forward with bipartisan political support and general industry acceptance. What troubles the hospital industry most about the new prospective payment mechanism is not the concept, but the Reagan administration's zeal for employing it as an instrument to moderate sharply the growth of Medicare spending.Medicare, like . . .