1 What are the following methods of payment: fee-for-service, per diagnosis, per diem, and capitation? Discuss the financial risk and opportunity for each method to the healthcare organization.

2 What is DRG? Briefly discuss how it is used for developing a prospective payment system? What is the possible financial incentive for hospitals under this payment system?

3 Explain the following methods of setting charges: RVU method, hourly rate method, and surcharge method. In what departments of healthcare organizations are these methods used?(Give some examples.)