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Related Experiment Videos

What do we know about rate-setting?

C L Eby, D R Cohodes

    Journal of Health Politics, Policy and Law
    |January 1, 1985
    PubMed
    Summary
    This summary is machine-generated.

    State regulation of hospital revenue, or rate-setting, has generally constrained costs where implemented. However, its effectiveness in new states and compared to competition remains uncertain for overall healthcare cost containment.

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    Area of Science:

    • Health economics
    • Healthcare policy
    • Public health

    Background:

    • State regulation of hospital revenue is a proposed method for healthcare cost containment.
    • Extensive data exist from state-level implementation, but findings are often complex and contested.
    • Both proponents and opponents of rate-setting cite evidence to support their claims.

    Purpose of the Study:

    • To summarize and evaluate the empirical evidence on state-level hospital revenue regulation.
    • To assess the effectiveness of mandatory rate-setting in controlling hospital costs.
    • To compare the potential of rate-setting versus market-based approaches for cost containment.

    Main Methods:

    • Systematic review and synthesis of existing evaluative data on state rate-setting programs.

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  • Analysis of data from the "laboratory of the states" to assess cost containment outcomes.
  • Comparative analysis of regulatory approaches versus market competition and selective contracting.

    • Main Results:

    • Mandatory rate-setting has generally demonstrated success in constraining hospital costs in states where it has been implemented.
    • The extrapolation of these results to additional states is uncertain.
    • The comparative advantage of rate-setting over increased competition and selective contracting for overall healthcare cost containment is unclear.

    Conclusions:

    • While state rate-setting can constrain hospital costs, its broader applicability and superiority over market-based solutions require further investigation.
    • Future policy decisions should consider the mixed evidence and the potential impact of alternative strategies like competition.
    • The ambiguity of existing data necessitates careful consideration when evaluating the role of regulation in healthcare cost containment.