To Buy or Not to Buy: Technology Acquisition under Prospective Payment

With the passage of the Medicare prospective-payment legislation¹ and issuance of the subsequent regulations,² hospital administrators (and to a lesser degree, physicians) have focused their attention on the question whether the current payment rales for diagnosis-related groups (DRGs) are sufficient to cover the costs of caring for patients with the technological arsenal that is already in place in hospitals. Considerably less attention has been directed at the impact the recent legislation may have on the rate at which hospitals will be able to acquire new diagnostic and therapeutic technology. The new payment system is predicated on a belief that under.