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HRD-80-72 1 (1980-09-19)

handle is hein.gao/gaobabbas0001 and id is 1 raw text is: 

BY THE COMPTOLLER GENERAL



Report To The Congress


OF THE UNITED STATES





Rising Hospital Costs Can Be Restrained

By Regulating Payments

And Improving Management



Cost-based retrospective payment for hospital
services is inherently inflationary. Yet, because
retrospective payment is the prevalent reim-
bursement method used by third-party payers,
both government and private, most hospital
payments today are based on costs. Since this
system guarantees hospitals the recovery of
virtually all reasonable costs incurred, hospitals
nationwide have not adopted, to the extent
possible, effective and easily implemented
management techniques to restrain cost in-
creases.

Some States that have abandoned the practice
of paying hospitals based on costs and adopted
hospital rate regulation programs have been
effective in restraining rising hospital costs.
Hospital rate regulation offers promise as a
means of restraining future cost increases.
The Congress should amend the Social Security
Act to allow the Health Care Financing Ad-
ministration to broaden Medicare participation
in hospital rate regulation programs which
contain stronger incentives for improved hos-                113339
pital management.




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                               ...IIII...                            HRD-80-72
   0'CC (T                                                   SEPTEMBER 19, 1980

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