A recently published report helps smack down a few common myths and misstatements concerning Medicare payments to hospitals. It is available as free full text here.
Myth # 1: Medicare is a fee-for-service system of reimbursement.
This is true only for part B Medicare. For part A, under which hospitals are reimbursed, the payment is a lump sum based on the diagnosis. Although that payment can be modified based on certain severity indicators there is no direct payment for services rendered. If Medicare paid hospitals for the services rendered it would be a retrospective, rather than a prospective payment.
Myth # 2: The wildly popular use of cardiac stents is driving health care costs out of control.
Not for acute coronary syndrome, which accounts for about two thirds of stents, according to the article. Following an uptick attributable to the shift from bare metal to drug eluting stents costs stabilized and, when adjusted for inflation, decreased slightly according to the report. To stretch the point a bit further just go back to the days before the reperfusion era of double digit mortality and two week lengths of stay. Scientific advancement, not external pressure, has driven the improvements in emergency cardiac care.
Myth # 3: The use of cardiac stents has been a big money maker for hospitals.
It's really quite the opposite. Cardiac stents have been a money loser. According to the report, Medicare payments fall short of estimated costs for patients hospitalized for ACS who receive emergency PCI.