The hypothesis is presented that prospective reimbursement will alter the adoption and dissemination of new technology in hospitals beginning immediately and extending into the indefinite future. During the past two decades the dramatic rise in health care costs has been paralleled by an equally dramatic adoption and proliferation of cost raising technologies. Both "big ticket" and "little ticket" technologies have contributed to the rising costs. Cost or cost-plus reimbursement mechanisms have fueled this phenomenon. Prospective reimbursement reverses the incentives for cost raising technology adoption and will select out cost saving technologies. Both the mechanism of prospective reimbursement and the psychological and political environment which accepts limitations in resources will make the stated hypothesis a reality.
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