When policymakers attempted to control Medicare costs, they focused first on

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When policymakers attempted to control Medicare costs, they focused first on hospital costs. Hospitals account for the largest share of Medicare spending, so controlling their costs could have a significant impact on overall Medicare spending. Policies such as the prospective payment system and accountable care organizations have been implemented to control hospital costs. While physician costs and prescription drug costs are also significant, they were not initially targeted as aggressively as hospital costs. Long-term nursing home costs are covered by Medicaid, not Medicare.

When Policymakers Attempted to Control Medicare Costs, They Focused First