Abstract
The Reagan administration has proposed a three-year phase-out of the Professional Standards Review Organization (PSRO) program. The resulting debate in the 97th Congress is focusing on conservatives' concerns that the program represents an intrusion into medical practice rather than liberals' fears that physician-based organizations will not conduct rigorous review. There are three possible future directions for PSROs: rapid elimination through budget cuts; retention of some PSROs at current budget levels, which would essentially mean slow starvation; or retention of some PSROs, with major changes in their relation to the federal government. Multiple sources of funding and a linkage of local PSRO budgets to local effectiveness could further enhance the performance of the best PSROs. As national mechanisms of health-care financing change, the role of PSROs should also change; there is a central place for physician-based review in "pro-competitive" health-care-financing systems.
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