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So, let's see how the situation was before and after these changes.
Before 1983
Hospitals had been reimbursed for all costs incurred in serving those patients.
Hospitals were rewarded for efficiency.
The buyers at the hospitals were specialist, without purchasing skills or interests in negotiating for prices.
Distributors were making great profits and not paying enough attention to costs.
After 1983
Under the new system, the payment to a hospital was based on national and regional costs for each DRG, not on the hospital's costs. Moreover, the national and regional averages were to be updated, so that if hospitals improved their cost performance, they would be subject to stricter DRG-related payment limits...
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