Transformation of Medicare Payment Systems and Impact on Hospital Incentives

The chapter delves into the historical shift of Medicare payment systems, comparing fee-for-service and prospective payment models and their influence on hospital behaviors. It explores the balance between longer hospital stays for financial gain versus early discharges for efficiency, illustrating how payment models shape healthcare practices. The discussion also touches on disparities in health outcomes by socioeconomic status and the importance of addressing social determinants of health for equitable healthcare.