The Prospective Payment System (PPS) Is Based on the Concept

question 27

Multiple Choice

The prospective payment system (PPS) is based on the concept that:

• A) reimbursement to hospitals is not a major problem.
• B) similar medical diagnoses result in the same hospitalization costs.
• C) standards of practice can be set.
• D) total patient care can be delivered in a safe and holistic manner.

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Definitions:

Willingness to Pay

The maximum amount an individual is prepared to spend to acquire a good or service or avoid something undesirable.

Consumer Surplus

The gap between what consumers are prepared to pay for a product or service and what they end up spending.

Market Price

The current value at which a good or service is bought or sold in the market, typically influenced by the forces of supply and demand.

Maximum Price

A price ceiling, often set by regulatory bodies, above which a particular good or service cannot be sold, intended to protect consumers.