Although the proponents of DRG system claim that the primary goal of its use is to improve the quality of health care services, while, at the same time, controlling costs, most analysts tend to accept the view that cost containment is the sole aim of DRG. The findings of research on the application of DRG do indeed confirm that a strong relationship does exists between case mix and cost. Other research, however, also confirms the existence of a positive relationship between the cost and quality of health care services. Thus, the quite strong possibility exists that, by reducing health care costs through the application of DRG procedures, the quality of the health care delivered will also be decreased. Of even greater potential significance is the strong probability that the use of DRG procedures to reduce costs will cause many care providers to withdraw their services from Medicare recipients. Studies of DRG applications indicate that actual delivery costs will be under funded by significant levels, when the procedures are
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