Potential responses to the Medicare pricing mechanism.

This article describes the Medicare pricing mechanism and explores potential responses to the reliance on the patient and related medical condition as the unit of payment. The analysis suggests that, although the provisions of PL 98-21 may benefit the Medicare program, the pricing system may jeopardize the financial viability of hospitals, increase inequities that emanate from differential pricing policies and, when viewed from the perspective of beneficiaries, reduce access to in-hospital care and the use of service once admitted.