Which of the following best describes how the government was successful at containing costs?
a. The original legislation for Medicare and Medicaid had built-in cost controls.
b. Certificate-of-need requirements restricted provider overtreatment.
c. Utilization review determined appropriateness of care.
d. Prospective payments were based on diagnosis-related groups (DRGs).
e. Peer standard review organizations were effective watchdogs.
ANS: D
Prospective payment based on DRGs proved to be effective. The cost reduction that resulted gave rise to the managed care revolution as providers searched for the most cost-effective mechanism of care provision. Various efforts from, for example, certificate-of-need, peer review, and utilization review were not effective.
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What will be an ideal response?
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