This paper examines the new Professional Standards Review Organizations (PSROs) program in light of a similar program (“Economic Monitoring”) that has been used in West Germany for over forty years. In the first section the PSRO program is described as government-mandated peer review by professional organizations, and is compared with that of the West German system. The second section argues that the PSROs are likely to strengthen the organization of established medicine, to increase the bargaining power of professional organizations, and to further insulate professional behavior from public scrutiny. The third section describes some of the effects of bureaucratic rigidities in peer review on the practice of medicine: the preservation of old technologies, the development of fixed patterns of practice, and the strengthening of the technical and interventionist biases in medical care. The final section evaluates the PSRO program as a complete delegation of congressional authority and a failure of Congress to set any rules for the development and application of norms and standards. The lack of any mechanism for accountability of the PSROs to public values and choices is emphasized.

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