The article analyzes the failure of Medicare’s payment structure to provide incentives for better care, and the recently-passed Medicare reforms do nothing to address the effort despite calls from health funding specialists. Psychiatry is different from much of the rest of medicine with respect to Medicare reimbursement in several respects. First, there are few “procedures” in my field, so the situation the article describes in which a hospital gets paid much less for, say, a pneumonia patient if the patient gets better without needing to be placed on a respirator does not apply. Secondly, in other areas of medical care, other than paying for procedures, there is flat-rate reimbursement by the admission or the incident, whereas in psychiatry, Medicare pays by the day (and, unlike other insurers, Medicare is not ‘managed’, i.e. there are no reviewers pressuring the hospital to treat the patient and discharge sooner to save the insurer money). So there is an incentive for psychiatric hospitals, especially those in the for-profit sector, to fill their beds with Medicare patients rather than divert any who present, no matter how possible to send them home instead and stabilize them in the community and prevent a needless admission that would be disruptive and distressing. Furthermore, there is an incentive for the hospital to fill their beds with less sick patients, because sicker patients will cost more in manpower, medications and other resources while they are hospitalized despite fixed reimbursement. I see this at my hospital, where clinical input into the appropriateness of admissions decisions has been excluded by the non-clinical corporate fiscal administrators, and I am convinced inappropriate Medicare admissions become a covert bulwark of the hospital’s profitmaking strategy.