Which of the following best describes how the government was successfu

Which of the following best describes how the government was successful at containing costs?

a. The original legislation for Medicare and Medicaid had built-in cost controls.
b. Certificate-of-need requirements restricted provider overtreatment.
c. Utilization review determined appropriateness of care.
d. Prospective payments were based on diagnosis-related groups (DRGs).
e. Peer standard review organizations were effective watchdogs.

ESSAYBID ANSWER

ANS: D
Prospective payment based on DRGs proved to be effective. The cost reduction that resulted gave rise to the managed care revolution as providers searched for the most cost-effective mechanism of care provision. Various efforts from, for example, certificate-of-need, peer review, and utilization review were not effective.