Five areas of hospital foodservice management, including; Inpatient Services, Cafeteria Services, Special Foodservices, Out-of-Hospital Services and Consolidation of Services, were studied to determine the impact of the 1983 Medicare Prospective Payment System. Ten Kentucky hospital foodservice directors were surveyed by phone. The Prospective Payment System had an impact on all areas of foodservice management, especially in the Inpatient Services. Foodservice directors developed cost containment and revenue generating programs in response to the DRG's. Note: The author has requested that her vita be removed from this Electronic Theses and Dissertation. / Master of Science