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Strategies for implementing global budgets

J Holahan1, L J Blumberg, S Zuckerman

  • 1Urban Institute, Washington, DC 20037.

The Milbank Quarterly
|January 1, 1994
PubMed
Summary
This summary is machine-generated.

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Implementing global budgets involves setting spending targets and policies. A combination of managed competition or premium regulation with all-payer rate setting shows the most promise for cost control in healthcare spending.

Area of Science:

  • Health Economics
  • Healthcare Policy
  • Public Health

Background:

  • Global budgets are a key strategy for controlling healthcare spending.
  • Effective implementation requires careful policy design and integration.

Purpose of the Study:

  • To analyze four distinct approaches to implementing global healthcare budgets.
  • To identify the most effective strategy for cost containment.

Main Methods:

  • Analysis of four alternative global budget models.
  • Evaluation of policy mechanisms including rate setting, volume controls, premium regulation, and managed competition.

Main Results:

  • The fourth model, combining managed competition or premium regulation with all-payer rate setting, demonstrated superior cost control capabilities.

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  • An independent policy for capital expenditures can enhance the success of any global budget strategy.

    • Conclusions:

    • The hybrid model integrating managed competition/premium regulation with all-payer rate setting is recommended for effective global budget implementation.
    • Addressing capital expenditures separately is crucial for maximizing the impact of global budget policies.