Posted on November 12, 2014 at 8:50 AM
For decades now, policymakers have been trying to slow down the growth of healthcare costs. For much of this time, a large part of that effort was directed at hospital spending. American hospitals are extremely expensive, and take care of patients with the most severe illnesses. So if we’re going to control costs, it seems to be the place to start.
But when you squeeze the healthcare balloon one location, it will surely expand in another. When Medicare began paying hospitals through a prospective system, called DRGs, hospitals realized the days of the blank check were over. So they started rushing people out of the hospital quickly, for outpatient follow-up. When third-party payers put pressure on hospitals to reduce how much they charge for expensive procedures, providers began offering such procedures in “outpatient surgery centers.” (To read the rest of the article and leave comments, please visit Forbes.)