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It has been proposed that Medicare pay for inpatient physicians' services on a per-case basis, giving physicians an incentive to economize on services delivered in the hospital. This report outlines the design of a possible demonstration of a system of per-case payment and considers the following key issues in developing such a design: (1) selecting the options most attractive to demonstrate, (2) participation in the demonstration, (3) setting payment rates, (4) site selection, and (5) evaluation of the demonstration. The demonstration would seek to determine how alternative methods of paying physicians would affect costs, beneficiary access and financial liability, and health status outcomes or quality of care.

This report is part of the RAND Corporation report series. The report was a product of the RAND Corporation from 1948 to 1993 that represented the principal publication documenting and transmitting RAND's major research findings and final research.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.