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54. See Smith, Paying for Medicare: The Politics of Reform.

55. “Health Care Cost Containment Strategies,” Hearing Before the Committee on Labor and Human Resources, United States Senate, 98th Cong., 2d sess. (21 June 1984), 192.

56. “Issues Relating to Medicare Hospital Payments,” Hearing Before the Subcommittee on Health of the Committee on Ways and Means, House of Representatives, 99th Cong., 1st sess. (14 May 1985), 158.

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63. “Status of the Medicare Hospital Prospective Payment System,” Hearing Before the Subcommittee on Health of the Committee on Ways and Means, 100th Cong., 2d sess. (1 March 1988), 83–84.

64. Bill Gradison interview with the author, 12 June 2002.

65. Leon Panetta interview with the author, 13 August 2002.

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83. Marilyn Moon interview with the author, 2 August 2002.

84. “Options for Health Insurance,” 187.

85. James Mongan interview with the author, 3 October 2002.

86. Michael Bromberg interview with the author, 23 July 2002.

87. Rick Pollack interview with the author, 29 October 2002.

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104. See Martin, Cathie Jo, “Nature or Nurture? Sources of Firm Preference for National Health Reform,” American Political Science Review 89, no. 4 (12 1995): 898–914CrossRefGoogle Scholar. For further evidence of and explanation for businesses responding to cost shifting by moving to various forms of managed care, see Coddington, Keen, and Moore, “Cost Shifting Overshadows Employers' Cost-Containment Efforts”; Clarke, Coddington, Keen, and Moore, The Crisis in Health Care; Berkman, Leslie, “Employers Treat Health Plan Costs with Managed Care,” Los Angeles Times, 24 01 1990, 7Google Scholar; Kenkel, Paul, “Employers More Willing to Trade Workers' Choice of Providers for Genuine Cost Containment,” Modern Healthcare (27 07 1992): 70Google Scholar; Duggan, Patrice, “Power Shift: Desperate to Control Health Insurance Costs, Employers Are Using Their Market Power to Force Down Doctors' Bills,” Forbes (18 02 1991), 80Google Scholar; Kertesz, Louise, “Health Cost Hikes Checked: Large Firms Report Managed Care Success,” Business Insurance (30 03 1992): 2Google Scholar; Kenkel, Paul, “HMOs' Savings Have ‘Spillover Effect,’” Modern Healthcare (13 01 1992), 30Google Scholar.

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118. Hacker, The Divided Welfare State, 318.

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121. For example, see Titlow and Emanuel, “Employer Decisions and the Seeds of Backlash,” 941–47.

122. Reinhardt, “The Predictable Managed Care Kvetch,” 908.

123. Oberlander, The Political Life of Medicare, 199.

124. Personal communication with Jack Ashby, MedPAC Hospital Research Director (7 August 2003): “The 14% PPS margins [in Fig. 1] come from ProPAC publications and are based on Medicare cost report data. The 0.98 to 1.01 payment-to-cost ratios [in Table 4] are, of course, from the AHA annual survey. The first and perhaps primary difference between the two measurements is that the cost report figure is an inpatient margin, while the AHA numbers cover all services hospitals provide for Medicare beneficiaries. Medicare inpatient margins have always been, and still are, much higher than Medicare outpatient margins. Besides that, though, the two data sources are fundamentally different in two ways. First, the cost report measure is based on Medicare-allowable costs while the AHA measure captures all costs per the hospitals' books. This difference also leads to a higher margin value for the cost report data. Second, the cost report measure reflects a complex method for allocating costs among payers, while the AHA data reflect a simple application of an RCC to charges by payer to produce costs by payer. While the proof has been illusive to date, we have anecdotal evidence that hospitals over the years have set their charges so as to maximize the allocation of costs to Medicare, which then biases the AHA payment to cost ratio downward. Charges are used in the cost report allocation also, but to a lesser degree than in the AHA data. This factor also leads to a higher value for the cost report data, and this manipulation of charges was at its zenith in the first few years of the PPS. The net result of all this in our minds [at MedPAC] is that the AHA data are quite useful for monitoring trends (which includes providing evidence that there has been cost shifting), but are much less useful in establishing the level of margins or payment/cost ratios.”