The Health Care Financing Administration is created to streamline the setting of Medicare and Medicaid rates.
The Medicare Fraud and Abuse Act passes Congress and is signed to law by President Carter. It mandates for hospitals that serve Medicare and Medicaid patients.
For-profit hospital chains report a 50% rise in the number of management contracts. Hospital Corporation of America has 68 hospitals in its fold, while Humana has 63 and Hospital Affiliates International has 48.
J. Alexander McMahon, president of the American Hospital Association, leads the fight to hold off President Carter's call for cost-containment legislation. A 9% cap on increased hospital revenues is the main challenge to the industry.
Joseph A. Califano, the new secretary of the Department of Health, Education and Welfare, reorganizes the department and works to control healthcare cost increases.
HMOs are viewed as "a passing fancy" by several prognosticators.
A group of 70 hospital administrators, government officials, association executives and academics talk about what healthcare will be like in 1987. They correctly predict a rise in outpatient services, the failure to pass national health insurance and curbs on the spread of technology such as CT scanners.
Hand-wringing. All through the year there are dire warnings about the impact of cost control at the state level and the prospect of federal regulation as well. The need for Medicare reform is touted by everyone, but nothing happens in Washington.
Data processing. Computer manufacturers flood hospitals with new products to speed the flow of billing and medical information. "Burroughs Corp., Detroit, has developed a new software package that for the first time includes accounting and billing programs as well as programs designed to store and transmit patient diagnostic and treatment information," we report.
COVER STORY MAY 1977
A survey of the top 50 hospitals ranked by number of beds finds a reduction in staffed beds, led by a 21.3% drop in psychiatric hospital beds.
The cut in psych hospital beds reflects a shift to ambulatory psychiatric care "for both financial and therapeutic reasons," Modern Healthcare reports.
The survey finds that capital equipment purchases are big news, as many hospitals add new computers and new computed tomography scanners while politicians moan about rising costs.
"The private hospital, as we know it, may well be an endangered species."
-Raymond C. Wilson, executive director of Southern Baptist Hospital, about government regulation of the industry