ABSTRACT
This chapter focuses on controlling payment for hospital services and identifies issues policymakers are likely to confront as they evaluate various health care reform proposals. It deals with an examination of the sources of hospital revenue and the so-called phenomenon of cost shifting. The chapter discusses the changing composition of services and revenues among hospitals and other providers and suppliers and go on to identify important policy considerations affecting the distribution of hospital revenues across geographic areas, types of facilities, and types of services. Preferences range from the current blend of public and multiple voluntary private payers to a government-controlled single-payer system with universal coverage. One of the most contentious aspects of health care reform will be the future role and responsibilities of private insurers and employers. Hospitals have been able to increase the stream of excess revenue because most private payers continue to pay either full billed charges or negotiated discounts from charges.
