are sector (Joint Economic Committee, 1985; Patricelli, 1984; Tratford & Work, 1983). Beginning in the late 1970s, government and private health care funders, as well as the general public, began to express public concerns over the rising costs associated with health care (Council of Economic Advisers [CEA], 1984; "As inevitable," 1983).
Seemingly countless numbers of techniques were proposed in the late 1970s and early 1980s to be employed in the control of health care costs. Of all the techniques proposed, however, three gained the greatest acceptance. These three were prospective reimbursement (PPS, for prospective payment system), hospital utilization review, and pre need contracted services.
Retrospective reimbursement is the traditional method of settling hospital charges in the US. The retrospective technique provides for the reimbursement of health care providers on the basis of after the fact determinations. Prospective reimbursement, conversely, provides for a prenegotiated fee for health care services which are to be provided.
The intent of the hospital utilization review technique is to reduce the "incidence of inappropriate or unnecessary hospitalization" (Tillotson & Rosada, 1983, p. 10). The hospital utilization review technique may be used with either a retrospective or a prospective reimbursement technique. When it is used with a prospective reimbursement practice, the third party health care services funder requires from the attending physician a certification of the medical necessity of the hospital admission. This certification is later reviewed by a panel of physicians, and no third party payment for hospital charges is made without such a certificate. As opposed to the prospective reimbursement technique, which is intended to control health care service costs while patients are admitted to the hospital, the hospital utilization review technique is designed to reduce the nu...