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Medicare uses Diagnosis-related Groups for prospective hospital payments nationwide, but the groups were not originally intended as such. The authors trace the development of this landmark program and explore the concept of product line management. Dr. Fetter, a leading authority in health care resource allocation, developed the entire framework for DRGs as(More)
If hospitals are to succeed in their efforts in cost control, they must segregate the influence of efficiency and effectiveness and integrate the medical staff into the management structure. One management model that facilitates such integration is Clinical Matrix Management. Using such a model, the distinct responsibilities in patient care can be(More)
  • R B Fetter
  • 1992
The Prospective Payment System (PPS) used by Medicare to pay hospitals is described. As Diagnosis-Related Groups (DRGs) are central to this system, they are described in some detail. While the results achieved by PPS have been impressive, opportunities to both improve and extend the approach are present. Problems with the approach are described, together(More)
environmental economist with Science Applications International Corporation (SAIC). Ash and Fetter are joint co-authors. We thank Jim Boyce and John Stranlund for their invaluable guidance, and we are deeply grateful to Nick Bouwes and Steven Hassur of the Environmental Protection Agency who have painstakingly developed and graciously provided us with(More)
The hospital is viewed as a human service enterprise whose primary function is the provision of diagnostic and therapeutic medical services. Its products are the specific sets of services provided to individual patients. A system for defining hospital products based on the characteristics of patients receiving similar sets of services has been developed and(More)
This paper outlines the system for cost accounting and managerial control which is an extension of the usually accepted departmental costing systems and takes as its units the 383 Diagnosis Related Groups (DRGs) considered to be the hospital's products. It is held that such an approach offers hospital managers a more powerful, analytic, budgeting, and(More)