The future of Medicare policy reform: priorities for research and demonstrations.

The Medicare program, the largest health insurance program in the United States, is clearly at a crossroads as it enters its third decade. Historical increases in health care expenditures, plus a changing political and economic landscape, have set the groundwork for policy reform. Basic reform strategies, most notably reimbursement arrangements, are discussed. In 1983, Congress enacted the prospective payment system (PPS), which initiated a fundamental change in the way hospitals are paid for care delivered to Medicare beneficiaries. But PPS is only a steppingstone to broader reforms such as capitation and evolving organizational models in the delivery of care. Policymakers' considerations of coverage of services, such as long-term care and organ transplants, are also discussed. Within the context of these policy reforms, the authors shape an agenda for research and demonstrations--the blueprint for taking us from "here to there."