New ways of managing under prospective payment and their impact on the principles and practice of infectious diseases.

Medicare's Prospective Payment System (PPS) and its Diagnostic Related Groups (DRG) have celebrated a second anniversary. There is little doubt that the momentum of change started by the prospective payment concept will be around for some time. The formula for success contains a new approach to the management of health care organizations, instilling new life into health care management, creating challenges of new relationships and roles for medical staff, and serving to reshape the organizational structure of health care providers. Medicare will not be the only benefactor of this new scheme as prepayment spreads to other payors and providers of health care. Health care organizations have an opportunity to be innovative. Success will depend on whether health care executives and physicians can change, whether the results are satisfactory to users and payors, and whether the right incentives are preserved. The practice of infectious disease can play a unique and beneficial role in the prevention and control of infections through cost-effective surveillance programs and in the development and management of the antibiotics formulary. The costs of care can be appropriately controlled under the fixed payment systems, and survival in the new environment, more assured.