The crisis in the American health care system at the turn of the new century can be viewed as the culmination of 3 decades of experiments, mostly unsuccessful, designed to control the spiraling costs of health care while also providing a reasonable level of access to care for all segments of the American population. Professional standards review organizations were introduced in the 1970s in an early attempt to make physicians responsible for controlling resource use in the hospital setting. Health systems agencies used the tool of certificate of need in an attempt to reduce the proliferation of unnecessary hospital beds and duplication of expensive medical technology. In the early 1980s, revisions in the federally sponsored health insurance programs for the aged and the poor populations led to a shift from cost-based hospital reimbursement to prospectively established prices based on diagnosis (diagnosis related groups) in the Medicare program and competitively bid per diem prices in the Medicaid program.
Hopper CL, Nation CL. The Academic Health Center in TransitionOverview. Arch Surg. 2001;136(2):144-146. doi:10.1001/archsurg.136.2.144