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Setting limits through global budgeting: hospital cost containment in Rhode Island
1Department of Political Science, University of Massachusetts, Dartmouth, USA.
Spectrum (Lexington, Ky.)
|December 3, 1996
Summary
Rhode Island
Area of Science:
- Health economics
- Healthcare policy
Background:
- Hospitals in Rhode Island have engaged in annual negotiations since 1974.
- These negotiations determine the statewide hospital cost increase cap, known as "Maxicap."
Purpose of the Study:
- To analyze Rhode Island's unique hospital cost containment strategy.
- To evaluate the effectiveness of a negotiated global cap on hospital expenditures.
Main Methods:
- Analysis of Rhode Island's annual negotiation process for hospital cost increases.
- Comparison with other states' dismantled or discredited rate-setting approaches.
Main Results:
- Rhode Island's negotiated global cap has maintained support from payers, providers, and officials.
- This approach contrasts with other states' experiences with rate-setting.
Conclusions:
- A negotiated global cap offers a viable alternative to formula-based rate-setting.
- This model can be part of an all-payer reimbursement system or a step toward broader reform.
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