## The Architecture of Early Discharge

Until 1983, Medicare paid hospitals simply by reimbursing them for whatever they billed (Fee-For-Service). This incentivized hospitals to keep patients in beds for weeks and run endless tests to rack up bills. To fix this, the government invented DRGs (Diagnosis-Related Groups)—a flat-fee payment system.

### FAQ

**Q: Why does the hospital try to kick me out so fast?**
A: If you go to the hospital for a hip replacement, Medicare pays the hospital a flat $15,000, regardless of whether you stay for 2 days or 20 days. Since an inpatient bed costs a hospital ~$2,200/day in nursing staff, electricity, and food, every single hour you remain in the hospital past the average recovery time is mathematically eating into the hospital's net margin. Hospitals are financially incentivized to discharge you to a rehab facility the exact second you are medically stable.