ABSTRACT

The government began to explore other ways of paying for medical care which would take into account some control of expenses. Prospective reimbursement is a system in which the hospital is reimbursed for an average case load which is determined in advance for the year. The basic objectives of prospective reimbursement are to establish controls, encourage better management of the hospital, discourage underutilization, improve facility utilization, and discourage excessive stays in the facility. The material to be collected and analyzed must include such items as budget by department, capitation, length of care, specific services, daily charges, etc. Hospitals have experimented with the method which brings the greatest return and there are strong indications that they have altered their approach to medical care in order to increase revenues. Programs of reimbursement which regulate the daily rate seem to produce more consistent results than those which use other means.