Analysis of the Rising Cost of Medicare The rising cost of medical care in the United States has been a concern for quite some time. Beginning in the 1960s with the advent of Medicare, a system has b
Analysis of the Rising Cost of Medicare The rising cost of medical care in the United States has been a concern for quite some time. Beginning in the 1960s with the advent of Medicare, a system has b
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Analysis of the Rising Cost of Medicare
The rising cost of medical care in the United States has been a concern for quite some time. Beginning in the 1960s with the advent of Medicare, a system has been needed that will balance cost with services provided within acceptable parameters. In 1982, the US Congress placed a cap on operating expenses for each Medicare case treated in a hospital, as a protective measure to insure adequate payment within reasonable limits. A prospective payment system (PPS) was initiated as a result of the cap, whereby hospitals receive a flat rate for each admission based on a calculation of rates determined by the diagnosis (Kahn, et al, 2019). A system whereby the diagnosis is grouped according to services, estimated length of stay and type of technology required for treatment was developed by Robert B. Fetter and John D. Thompson in the early 1980s (Burke, 1992). The diagnostic related groups (DRGs) form the basis for the payment system. This system was originally set up for use with