Ethical Perspectives on Prospective Payment

The prospective payment system (PPS) for reimbursement of Medicare hospital charges through diagnosis-related groups (DRGs) and peer review organizations (PROs) is explained and its ethical implications for health care are examined. Concern that PPS has had a negative impact on patients is focused around hospital admissions, care for the sickest of patients, the quality of hospital care, and the appropriateness of discharge from the hospital. Professionals who provide health care have felt the impact of PPS through new pressures from PROs and from hospital administrators, from caring for sicker patients, and from providing more care outside the hospital setting. Recommendations are made to monitor the quality of care in other settings after discharge from an acute care hospital, to control hospitals' ability to shift DRG profits out of direct patient care, to insulate health care professionals against financial pressures, and to maintain the vitality of informed consent. (KIE abstract)