What is the main purpose of the PPS?

The main purpose of the Prospective Payment System (PPS) is to offer a payment structure where healthcare providers receive a predetermined amount for specific services based on diagnoses or procedures rather than the actual costs incurred during care. This system encourages efficiency and cost control in healthcare delivery, as providers are incentivized to manage their resources effectively while still maintaining the quality of care.

Under the PPS, healthcare facilities, particularly hospitals, are compensated based on the classification of the patient's diagnosis at the time of admission. This helps to streamline payments and predict healthcare costs more accurately for both patients and insurers. By establishing a prospective payment methodology, the system aims to stabilize spending while promoting a standardization of healthcare services, ultimately benefiting both providers and patients through improved financial predictability.

Other options center around different aspects of healthcare provision and regulation. While preventive care services are crucial for reducing overall healthcare costs, they are not the focus of the PPS. A fee-for-service system, on the other hand, involves billing for each individual service provided rather than a lump sum payment for a condition or treatment, which contrast the objectives of PPS. Lastly, while regulating hospital standards is important for ensuring quality healthcare delivery, it is not directly related to the specific payment methodology established by the PPS.