Volume Performance Standards: Can They Control Growth in Medicare Services?

Congress has adopted volume performance standards (VPSs), a system using collective incentives, as a means to control costs of physicians’ services under the Medicare program. Past efforts to curb expenditures failed to focus sufficiently on providing direct incentives to individual providers or consumers, and did not achieve desirable results. West German and Canadian experiences suggest that mechanisms to contain costs may work best when their scope is regional rather than national, prompting the view that the VPS system should operate on a state level. The system’s efficacy may also require Medicare officials to analyze utilization patterns assiduously, and states’ medical and professional organizations to monitor physicians’ practices and formulate due practice guidelines.

Author(s): Thomas Rice; Jill Bernstein

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Volume 68, Issue 3 (pages 295–319)
Published in 1990