Part B reimburses Medicare the same amount for health care provided to its eligible beneficiaries as its Medicare beneficiaries receive for similar health care provided by the private sector. The DRGs were not only more expensive but also more controversial, causing hospitals to begin lobbying to be allowed to charge different prices for some of the same services they were currently receiving reimbursement for. The result was the creation of Medicare Advantage plans. In 1985, Medicare offered new payment schedules for some procedures and services that had been available under its conventional fee-for-service payment system, called the fee-for-service payment system. This payment program was not well received by some providers who opposed the creation of a separate payment for these services.
Medicare pay-as-you-go payment scheme. A second major cost control initiative in the 1990s followed the creation of Medicare Direct Medical Insurance Plan and Medicare Advantage Programs programs. As part of this effort, Medicare began to use its newly-created Title XVIII authority to require that beneficiaries pay the full cost of certain services and procedures that were covered by private insurance or other plans that reimbursed the cost at a higher rate. In addition to the cost-containment initiatives discussed above and discussed in Part II of this post, there had been several other cost-control efforts to control hospital cost growth and costs in the hospital sector. The most successful was the use of electronic health records to collect billing information from doctors and hospitals so that they could be more accurate and timely in identifying and recording the diagnoses and treatment of patients. The terazosin hydrochloride was initially implemented by the Veterans Health Administration, but by the time it was adopted by the VHA, the system had been adopted by all hospitals and medical departments across the country and was widely adopted by all medical services in the public and private sectors.
As of June 1991, the VHA had enrolled more than 990,000 patients in the system. The terazosin hydrochloride cost control initiative in the public sector was launched in 1985 by the Centers for Medicare& Medicaid Services in response to a growing concern that the cost of care was increasing too rapidly in the public sector. After DRGs, hospital charges are based on the total cost of the hospital stay for each category of outpatient care.
DRGs are intended to encourage cost containment and to reduce unnecessary hospital days. In the private sector, the costs associated with hospital stays have been growing as the population has matured and health care has become more efficient. But hospitals have been slow to adopt DRGs, and they are now under pressure to reduce their costs.
In particular, because the government has mandated the Medicare program to use DRGs, private insurers, too, are pushing hospitals to reduce hospital costs. These efforts have not been successful yet, but it's clear they will be in the future. What has been particularly surprising about this increase is the extent to which hospitals are moving more costs onto the backs of patients, or at least onto the backs of their customers. This increase was particularly pronounced among fee-for-service hospitals, which have grown the most. This increase was driven primarily by increases in patient fees of more than$200, particularly in areas such as hospitalization and long-term care.