Return to APA Collection Inventory Page
Image file of document
Text of document:
State, U-M like pre-set Medicare fees
From Staff and AP Reports
A Regan administration proposal to set Medicare fees in advance has
been greated with cautious optimism by spokesmen for the Michigan Hospital
Association in Lansing and University of Michigan Hospitals in Ann Arbor.
Health and Human Servies Secretary Richard S. Schweiker Wednesday outlined a prospective payment plan for Medicare - the federal program which pays for health care for the elderly. Schweiker's plan would tie hospital fees to patient diagnoses. Hospitals would get a predetermined fee, regardless of how long or how briefly a patient stayed for treatment. Hospitals would receive fees based on how each case falls into a spectrum of 467 standard diagnoses.
Both MHA and U-M spokesmen said Thursday they have not seen details of Schweiker's proposal. But both said prospective reimbursement, under which payments to hospitals are predetermined - based on the previous year's expenses plus an inflation factor - has worked successfully in Michigan in other programs.
Both Medicaid, which pays for health care for low-income patients, and Blue Cross-Blue Shield, Michigan's largest health insurer, have used a prospective reimbursement system to set payments to hospitals for the past several years.
"The notion of prospective reimbursement for Medicare is something which we support conceptually," said an MHA official. "However, we may not be in agreement with the details (of Schweiker's proposal.)"
"It can certainly be a workable system," said C. Edward Schwartz, senior associate director of U-M Hospitals. "We're waiting to see specifics."
Schwartz said he is particularly concerned about whether reimbursement formulas will take into consideration the degree of illness or the medical complications of a patient with a particular diagnosis.
"It could be a horrendous problem or no problem at all," Schartz said.
Ann Arbor News
A Special News Report on People And Their Jobs in Offices, Fields and Factories
SICK CALL: Many hospitals begin cutting staffs to reduce costs.
The recession and a federal law putting a cap on certain Medicare and Medicaid reimbursements prompt hospitals to cut support workers. Georgetown University Hospital, Washington, D.C. lays off 31 workers. New York Health & Hospitals Corp., New York plans to elimiate 700 jobs at its 16 hospitals. Boston's Brigham and Women's hospital reduces its work force by 150 or 2%, and expects additional reductions.
Others search for further savings. Detroit's Henry Ford Hospital freezes wages this year. The city's Harper Grace Hospital for the first time does a formal quarterly assessment of staffing to control costs. Massachusetts General sets up a committee to review all non-nursing vacancies in an effort to spare its staff. But New York City's 55 voluntary hospitals haven't had any layoffs.
The American Hospital Association predicts more layoffs over the next two years, as the federal reimbursement cap is phased in.
Wall Street Journal
January 25, 1983
(End of text)