The Medicare Payment Advisory Commission released its recommendations for changes to Medicare, and they aren't just playing around at the margins.

Key recommendations include -

--instituting a pay-for-performance scheme for hospitals, doctors, and home-care facilities (no details provided...)
--extend the moratorium on building specialty hospitals for an additional 18 months, which would end the prohibition at the end of 2006
--reduce hospital reimbursement below the overall increase of the market-basket 3.3% to just 2.9%.

Hospitals will certainly breathe a bit easier with the extension of the moratorium on construction, at least those hospitals facing competition from privately-funded ambulatory surgical, cancer, and orthopedic centers.

As suggested here before, prepare for a significant change in government-funded health care programs. And, prepare for the downstream effect of these changes as providers seek to recoup lost revenue from private payers.