Abstract
In the 1980's, some hospitals established internal agencies to regulate cash flow and capital expense. State agencies promoted the evolution of healthcare facilities into more business-like organizations. Attention to the following matters will reduce hospital costs: 1) prevent or reduce nosocomial infections; 2) treat diseases at a stage amenable to outpatient therapy; 3) obtain complete information about the policies of each HMO, adhering to them as closely as possible; and 4) keep comprehensive medical records, both to justify every admission and to penalize physicians who do not fully justify admission. Co-payments have increased from hundreds to thousands of dollars: the first $1,000 to $5,000 often comes from the patient's pocket. New technology and drugs must be paid for by premium increases. Hospital costs have increased beyond premium increases. The situation will probably explode unless something happens. Socialized medicine will solve the problems of non-payment by patients, but it will affect the middle class who are struggling with economics and will put them in worsening financial status, while the people with more income will end up paying out of pocket to get the care they need.
Highlights
The healthcare economy has fluctuated greatly in the United States
State agencies promoted the evolution of healthcare facilities into more business-like organizations
Prior to the introduction of fee for service at this time, cost accounting was almost nonexistent in the healthcare industry
Summary
The healthcare economy has fluctuated greatly in the United States. State agencies promoted the evolution of healthcare facilities into more business-like organizations. Prior to the introduction of fee for service at this time, cost accounting was almost nonexistent in the healthcare industry. Most hospitals were non-profit corporations run by charitable organizations that Kimbalo thought should be protected from financial risks; providers were paid by a system called cost reimbursement[1].
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