Study indicates mixed cost containment-efficiency results from PPS implementation.

Abstract

The prospective Payment System (PPS) has put the nation's hospital industry at extreme risk of financial failure and closure. With the PPS in effect, hospital incentives changed from Medicare reimbursement maximizers to the development of programs and the implementation of organization changes which would control cost and encourage efficiency. Specifically, the Federal Government wanted to reduce or at least maintain at a constant level their cost for the Medicare program.