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This paper analyzes changes in hospital labor productivity from 1980 through 1989. Our primary measure is called aggregate productivity, defined as the ratio of admissions (after controlling for the complexity of patients treated) to full-time equivalent employees. To scrutinize changes in aggregate productivity more closely, we also developed two component measures. These are intermediate productivity, which examines the labor necessary to produce a set of patient care services, and the intensity of services. The data show that hospitals clearly became more efficient in producing services during the 1980s. However, these gains were overwhelmed by more services being provided, resulting in a decline in aggregate productivity. The pattern of intensity and productivity changes can be associated with some distinct phases of the Medicare prospective payment system.

The article presents the author's perspectives on costs of U.S. health care systems. The author states that people sort of talking about costs and spending interchangeably because what the cost of one person is the spending of another person. The author says that while people spending so much money and are 46 percentage points higher than any other country, in terms of gross domestic product or expenditures per capita.

Reports developments related to elderly care. Influence of social policy on the structuring and financing of health and income-security programs in the United States; Comparison between the prescription drug policies for the elderly in Australia, Canada, Germany, Japan, New Zealand, United Kingdom and United States; Strategies used to ensure access while controlling drug costs.

Presents a forum on the advantages of increasing health care spending in the U.S. Accounts on the managed care and payment policies imposed by government spending programs; Impact of economic development on health care spending; Factors contributing to the increase of health care cost.

Presents letters to the editor published in the January 1, 2004 issue of the periodical "Health Affairs," which focus on increasing cost of medical care in the U.S., population ageing and Medicare et al. Letter by explaining possible reasons for hospital spending increases; Assertion of a reader that population aging is not the cause of increase in medical care; Major challenges faced by Medicare.