Prospective Payments by Medicare

Paper Summary:

The paper discusses the prospective payment system developed as a quality comparison tool in order to address the increasing costs generated from the Medicare system. The paper relates that the federal government introduced the prospective payment plan into the Medicare system and that under this system, hospitals are paid a pre-determined rate for each Medicare admission.The paper then discusses the effectiveness of the payment system and highlights the strengths and weaknesses. The paper concludes that the prospective payment system has withstood the test of 22 years and its strengths and weaknesses will continue to be debated but according to government standards, it has been an effective system.

Outline:
Introduction
Effectiveness of Prospective Payment
Strengths
Weaknesses
Conclusion

From the Paper:

"The Prospective Payment System is a way for spending to be curbed within the private sector (Tieman, 2003). Hospitals and healthcare facilities are given incentive to be efficient and cost-effective (Coulam and Gaumer, 1991). When the Prospective Payment System was implemented, there were strongly held expectations among promoters and skeptics (Coulam and Gaumer, 1991). Promoters of the policy hoped that payment reduction would be matched by lower levels of spending through a reduction in lengths of stay, a reduction in the intensity of care, and therefore, more efficient hospital operations. "

Sample of Sources Used:

• American Hospital Directory, (2004). Medicare prospective payment system. Retrieved July 18, 2004 from Http://www.AHD.com/pps.html
• Coulam, R. and Gaumer, G., (1991). Medicare's prospective payment system: A critical appraisal. Health Care Financing Review, 13, (1): 45-78. Retrieved July 18, 2004 from Apollo Library: Infotrac.
• Kajander, J. and Samuels, M., (1996). Future trends in the health care economy. Journal of Health Care Finance, 23, (1), 17-23. Retrieved July 18, 2004 from Apollo Library: Infotrac.
• Serkes, K., (2000). Doctors Medicare fraud solution to save billions: Doctors report show Medicare is designed for fraud. Retrieved July 18, 2004 from website, Http://www.aapsonline.org/press/nrmedfr.htm
• Teitleman, R., (1984). Full employment for lobbyists: Prospective payment for Medicare has worked fairly well in its first year, but there are problems. Forbes, 134, 119- 121. Retrieved July 19, 2004 from Apollo Library: Infotrac.

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