When legislation was enacted in 1983 establishing prospectivepayment for hospitals, the incentives for hospitals changeddramatically. Cost-based payments for hospital days and serviceswere replaced with a set payment per admission that was basedon the patient's diagnosis-related group. The goal of the legislationwas to encourage shorter lengths of stay and more efficientcare, but policymakers were also concerned about possible increasesin readmissions. Higher rates of readmissions, they thought,might be a consequence of the legislation either because patientsmight be prematurely discharged from the index hospitalizationor because services might be "unbundled" by hospitals in an. . . [Full Text of this Article]
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From the Department of Health Policy and Management, Harvard School of Public Health; and the Division of General Medicine (Section on Health Services and Policy Research), Brigham and Woman's Hospital, Harvard Medical School — both in Boston.
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