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Where Do DRGs Come From?

Rick Mayes of the University of Richmond and Robert A. Berenson have written and very scholarly, while easy to read, history of how Medicare has paid its bills, "Medicare Prospective Payment and the Shaping of U.S. Health Care" (Baltimore, MD: Johns Hopkins University Press, 2006). Unfortunately, they seem to believe that the MPPS has benefitted U.S. health care!

Unfortunatley, Medicare Prospective Payment System has contaminated the private market, too. I asked a private health insurance executive why they based all their payments on Medicare payments. The answer: "Because it would cost too much to set up a duplicate system."

Also, did you see that when CMS recently announced that Medicare would no longer pay for certain avoidable hospital errors, some private insurers subsequently said they'd do the same?

Following, not leading, the government: that's the state of private health care in America today.
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