Redefining rate regulation in a competitive environment

Neither rate regulation nor market competition alone is likely to contain health care spending in the long run. We need an approach to cost containment that can simultaneously address the major causes of rising health expenditures: higher prices, greater intensity, and new technologies. Whereas rate...

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Bibliographic Details
Published inJournal of health politics, policy and law Vol. 21; no. 3; p. 489
Main Authors Wallack, S S, Skwara, K C, Cai, J
Format Journal Article
LanguageEnglish
Published United States 1996
Subjects
Capitation Fee
Cost Control - standards
Health Care Costs - standards
Health Maintenance Organizations - economics
Hospital Costs - standards
Humans
Managed Care Programs - economics
Managed Competition - economics
Maryland
Rate Setting and Review
State Health Plans - economics
United States
United States
Maryland
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Summary:Neither rate regulation nor market competition alone is likely to contain health care spending in the long run. We need an approach to cost containment that can simultaneously address the major causes of rising health expenditures: higher prices, greater intensity, and new technologies. Whereas rate regulation and market competition have been viewed as alternative strategies, an innovative approach would include a rate-regulatory system that is compatible with an evolving competitive market. We discuss the Maryland hospital rate-setting system as an illustration of the compatibility of a regulatory approach within a competitive market. In addition, we consider the feasibility of expanding a hospital rate-setting system nationwide and to the nonhospital sectors.
ISSN:0361-6878
DOI:10.1215/03616878-21-3-489