Prospective Payment and the University Hospital

TLDR

The new Medicare prospective‑payment system, while covering hospitals' educational expenses, threatens complex care and biomedical research, endangering university hospitals. Three years of New Jersey’s experience indicate that the new payment rules will likely shrink university hospitals and the national medical‑education apparatus, though targeted refinements could mitigate this effect. No additional information.

Abstract

Despite the coverage of hospitals' educational expenses under the new Medicare prospective-payment system, that system poses a danger for complex care and biomedical research, and thus for university hospitals. New Jersey's three years under a similar system make this clear.The new payment rules seem certain to lead to shrinkage in the size or number of university hospitals — possibly both. Indeed, they provide a convenient means for shrinking the nation's entire medical-education apparatus. Recent New Jersey history indicates, however, that refinement of certain features in the new system and in the way academic medicine is financed may preserve the . . .