Prospective payment for capital costs: incentive for good management

THe inclusion of capital-related costs under PPS will create many challenges to the purchasers of capital equipment. It will be increasingly difficult for health care providers to purchase equipment which enhances the quality of care, but which provides little or no economic benefit. Managing purchases under this new legislation, in a way that will maximize the goals of the hospital, will require hospital-wide strategic and financial planning, the capability to perform detailed feasibility analysis, and excellent negotiation skills.