title: Effects of the Medicare prospective payment system on hospital cost containment: an early appraisal.
abstract: 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.
authors.affiliation: Vanderbilt University.
authors.forename: F A
authors.initials: FA
authors.lastname: Sloan
authors.forename: M A
authors.initials: MA
authors.lastname: Morrisey
authors.forename: J
authors.initials: J
authors.lastname: Valvona
mesh_terms: D003363:Cost Control / Q000706:statistics & numerical data; D004469:Economics, Hospital / Q000706:statistics & numerical data*; D006788:Hospitals, Voluntary / Q000191:economics; D006278:Medicare; D015397:Program Evaluation; D011445:Prospective Payment System / Q000191:economics*; D011787:Quality of Health Care; D012044:Regression Analysis; D014481:United States