A proposed research program for hospital-medical care.

This proposal for a federal government program of health services research, written in spring of 1966, played a key role in development of the National Center for Health Services Research and Development, announced by the President early this year. The paper points to the lack of economic incentives for development of cost-saving innovations for hospitals compared to incentives to develop innovations improving the quality of care. It indicates the analytic procedure which, if followed, would lead to an efficient program of research, and points out several aspects of the analysis that are critical requirements for its successful application.