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The next step: introducing competitive pricing into PPS.

R F Averill, M J Kalison

    Healthcare Financial Management : Journal of the Healthcare Financial Management Association
    |July 9, 1986
    PubMed
    Summary
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    The current Physician Payment System (PPS) has saved Medicare money. Introducing competitive market forces could further reduce healthcare program costs.

    Area of Science:

    • Health Economics
    • Healthcare Policy

    Background:

    • The current Physician Payment System (PPS) has demonstrated success in achieving substantial cost savings over a three-year period.
    • Analysis of the existing PPS model is crucial for understanding its impact on Medicare program expenditures.

    Purpose of the Study:

    • To evaluate the effectiveness of the current Physician Payment System (PPS) in reducing Medicare costs.
    • To identify strategies for further cost reduction within the Medicare program.

    Main Methods:

    • Review of financial data and cost-saving metrics associated with the PPS over three years.
    • Analysis of market dynamics and potential impacts of introducing competitive forces.

    Main Results:

    • The existing PPS has successfully generated significant cost savings for the Medicare program within the observed timeframe.

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  • Preliminary assessment suggests that competitive market forces have the potential to enhance cost-saving measures.

    • Conclusions:

    • While the current PPS has proven effective in cost containment, further reductions are achievable.
    • Introducing competitive market forces into the Medicare program is recommended to optimize cost-efficiency.