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Hospital wage and price controls: lessons from the Economic Stabilization Program
R J Ozminkowski1, G Gaumer, A J Coit
1Abt Associates, Inc., Bethesda, MD 20814, USA.
Health Care Financing Review
|December 4, 1994
Summary
Mandatory wage and price controls, like the 1970s Economic Stabilization Program (ESP), had minimal impact on hospital costs. Given industry changes, similar controls would likely be ineffective today for healthcare reform.
Area of Science:
- Health economics
- Healthcare policy
- Economic history
Background:
- Rising healthcare costs prompt consideration of wage and price controls.
- The Economic Stabilization Program (ESP) in the early 1970s was the last major imposition of such controls.
Purpose of the Study:
- To analyze the impact of the Economic Stabilization Program (ESP) on hospital economic behavior and utilization.
- To assess the potential effectiveness of similar controls in today's healthcare environment.
Main Methods:
- Analysis of hospital economic behavior and utilization trends before, during, and after the ESP.
- Review of existing literature on factors influencing hospital behavior during the ESP period.
Main Results:
- The ESP had a limited effect on hospital economic behavior and utilization.
- Significant changes in the hospital industry since the 1970s make historical comparisons challenging.
Conclusions:
- The Economic Stabilization Program (ESP) demonstrated limited effectiveness in controlling hospital costs.
- Reintroducing similar wage and price controls today is unlikely to significantly impact healthcare costs due to industry evolution.