An examination of winners and losers under Medicare's prospective payment system.

Through case studies of 10 matched pairs of winner and loser hospitals under the Medicare prospective payment system (PPS), specific characteristics and management actions were identified that are related to strong financial performance. Because other payers are increasingly adopting PPS-like cost control incentives and because managed care is fundamental to the national health care reform debate, the successful strategies identified in this article may be of increasing importance to hospital managers.