These data suggest that approximately 70,000 children hospitalized in the United States experience an adverse event each year; 60% of these events may be preventable. The epidemiology of adverse events and preventable adverse events in children is different than in adults. To reduce the adverse events that occur in hospitalized children, research should focus on adolescent hospitalized patients, birth-related medical care, and diagnostics in pediatric medicine.

New strategies to control U.S. health spending growth are urgently needed. Although provider payment cuts are likely, cutting fee-for-service (FFS) payments will hurt quality and access. A more sensible approach would be to restructure the delivery system into organized networks of providers delivering reliable, evidence-based care. But restructuring will not occur without payment policy reform. Four policy options are commonly cited: recalibrating FFS, instituting pay-for-performance, creating episode-based payments, and adopting global payments. We argue that episode payments are the most immediately viable approach, and we recommend that payment reforms precede any payment reductions so that new delivery models can gain traction. [Health Affairs 28, no. 2 (2009) T h e r e i s s t r o n g c o n s e n s us t h at t h e U.S. health care system fails to provide either the quality or the value that it should, and that substantial restructuring is urgently needed. 1 Despite deep dysfunction and numerous public and private reform efforts, the system has been astoundingly resistant to change. 2 But health spending has reached a level where continued annual increases two to three percentage points faster than the nation's economic growth will increasingly limit the ability of employers and public programs to offer health coverage. Unless the forty-year historical spending trend miraculously abates, vigorous expansion of public and private cost control initiatives is inevitable.Of the strategies capable of immediately slowing growth in health spending, reducing benefits and limiting services run counter to the urgent need to improve health care access. This leaves provider payment cuts as the "least bad" option for achieving short-term savings. However, in the fragmented U.S. delivery system, cutting fee-for-service (FFS) payments over any sustained time period will hurt w 2 6 2 2 7 J a n u a r y 2 0 0 9 C o m m e n t a r y

949s o u n d i n g b o a r d T h e n e w e ng l a n d j o u r na l o f m e dic i n e ELECTION 2012In this election year, U.S. national spending on health care will reach $2.8 trillion, or about 18% of total spending on all goods and services. This high level of spending reduces our ability to invest in other important parts of the economy and also adds to our unsustainable national debt. There is wide agreement that we must find ways to bend the health care cost curve. Taking different approaches, the two articles that follow present a range of options, including reducing both the prices and quantity of services for public and private payers, reducing administrative costs, implementing new market-based incentives, and reforming the tax subsidy for employer-sponsored health insurance. It is our hope that these articles will stimulate discussion and debate on the best ways to address the cost problem and to place our health care system on a more sustainable path.

Over the past twenty-five years, the average ratio of hospital charges for services (gross revenues) to payments received (net revenues) has grown from 1.1 to 2.6. This reflects a transition from predominantly cost-and charge-based payment systems to regulated and negotiated fixed payments. Hospitals have been able to squeeze additional revenues from remaining charge-based payers and services by sharply increasing charges, negatively affecting the uninsured. Although protection of the uninsured seems warranted, it might be difficult to regulate hospital pricing systems in isolation from other controversial issues, such as the acceptability of cross-subsidies and the role of market forces. [Health Affairs 25, no. 1 (2006): 45-56] O c c a s i o na l n e ws s to r i e s have "exposed" inexplicable prices for products and services provided by hospitals, such as a five-dollar aspirin pill. During the past twenty-five years, hospital charges have gone from tracking fairly closely with production costs to exceeding them many times over. Are hospitals aggressive price-setters that are brazenly taking advantage of patients at their most vulnerable moments? Or have powerful payers lowered hospital payments to levels that force hospitals to seek additional funding from a limited number of other payer groups?This paper attempts to shed light on the forces that have generated the gap between billed charges and underlying costs by tracing the history of setting charges for hospital services and examining the role and implications of the chargemaster (catalog of retail list prices) for hospitals, purchasers, and patients. Data were obtained from a literature review and interviews with a small convenience sample of senior executives and other professionals working in the hospital industry in different parts of the country, including for-profit and not-for-profit settings.

Policy makers have been trying to replace Medicare's fee-forservice payment system for years with approaches that pay one price for an aggregation of services. The intent is to reward providers for offering needed care in the most appropriate and cost-effective manner. Medicare's first payment change designed to accomplish such a change was the hospital prospective payment system, introduced during 1983-84. But because it focused only on hospital care, its impact on total Medicare spending was limited. In 2011 Medicare began a new initiative to expand the "bundled payment" concept to link payments for multiple services that patients receive during an episode of care. The goal of Medicare's current bundled payment initiative is to provide incentives to deliver health care more efficiently while maintaining or improving quality. This article provides a detailed analysis of how Medicare implemented the hospital prospective payment system, how hospitals responded to the new incentives, and lessons learned that are applicable to the bundled payment initiative. The lessons include that any Medicare payment reform needs to continuously respond to the many different components of the health system and that payment reform should be coupled with analogous reforms in private insurance payment, so that providers receive consistent signals to alter their behavior.