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Hospital payment based on diagnosis-related groups
1Department of Operations Research, Yale University, New Haven, CT 06520.
Journal of the Society for Health Systems
|January 1, 1992
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.