title: Hospital payment based on diagnosis-related groups.
abstract: The Prospective Payment System (PPS) used by Medicare to pay hospitals is described. As Diagnosis-Related Groups (DRGs) are central to this system, they are described in some detail. While the results achieved by PPS have been impressive, opportunities to both improve and extend the approach are present. Problems with the approach are described, together with alternatives to direct payment.
authors.affiliation: Department of Operations Research, Yale University, New Haven, CT 06520.
authors.forename: R B
authors.initials: RB
authors.lastname: Fetter
mesh_terms: D003953:Diagnosis-Related Groups / Q000145:classification / Q000191:economics*; D004194:Disease / Q000145:classification; D005377:Financial Management, Hospital; D006760:Hospitalization / Q000191:economics*; D006801:Humans; D007902:Length of Stay; D008396:Maryland; D016344:Medicare Part A / Q000458:organization & administration*; D011357:Product Line Management; D011445:Prospective Payment System / Q000458:organization & administration*; D014481:United States