Effects of the Medicare prospective payment system on hospital cost containment: an early appraisal.

Journal Article (Journal Article)

In 1983 federal efforts to contain hospital costs were coalesced under the Medicare prospective payment system (PPS)--a "self-interest" approach to administered prices. Diagnosis-related groups (DRGs) and the tougher peer review organizations (PROs) serve to define "products"; PPS sets the price on each. The effects of PPS go beyond Medicare; they have been system-wide. Differential impacts on hospital utilization, substitution of capital for labor, and quality are examined through a variety of data sources and descriptive as well as regression analyses. The greatest cost savings are attributed to a reduction in hospital admissions per capita.

Full Text

Duke Authors

Cited Authors

  • Sloan, FA; Morrisey, MA; Valvona, J

Published Date

  • January 1988

Published In

Volume / Issue

  • 66 / 2

Start / End Page

  • 191 - 220

PubMed ID

  • 3054469

Electronic International Standard Serial Number (EISSN)

  • 1468-0009

International Standard Serial Number (ISSN)

  • 0887-378X

Digital Object Identifier (DOI)

  • 10.2307/3350030


  • eng