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Proprietary hospitals in cost containment.

D A Jones

    The American Journal of Cardiology
    |August 23, 1985
    PubMed
    Summary
    This summary is machine-generated.

    Controlling healthcare costs requires addressing root causes like subsidies and inefficient reimbursement. A shift to fixed Medicare payments in 1983 effectively slowed medical inflation by tackling these issues.

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    Area of Science:

    • Health Economics
    • Public Policy
    • Healthcare Management

    Background:

    • Rising healthcare costs are a significant concern, driven by factors that create a false sense of
    • free
    • healthcare and reward provider inefficiency.

    Purpose of the Study:

    • To analyze the primary causes of escalating healthcare expenditures.
    • To evaluate the impact of policy changes on medical inflation.

    Main Methods:

    • Analysis of healthcare cost drivers, including subsidies and reimbursement models.
    • Examination of the effects of Medicare's transition to fixed, prospective payment systems in 1983.

    Main Results:

    • The combination of demand stimulation and cost-plus reimbursement significantly increased healthcare costs.

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  • The shift to fixed Medicare payments has been effective in moderating Medicare expenditure growth.
  • Hospital sponsorship (voluntary vs. investor-owned) does not determine cost-effectiveness.

    • Conclusions:

    • Addressing the root causes of healthcare inflation, such as subsidies and reimbursement policies, is crucial for cost control.
    • Management's commitment to cost control is the key determinant of a hospital's cost-effectiveness, irrespective of its ownership structure.