Strategic choices for cost containment under a reformed U.S. health care system

The Clinton administration health reform proposal would impose global spending limits to bring the rate of increase in health care spending into line with the Consumer Price Index by 1999. This paper examines cost containment strategies available to states and health plans under externally imposed revenue limits. Drawing on the experience of state and local regulatory agencies, private sector managed care plans, and models in other countries, we contrast premium caps and provider rate setting as mechanisms to reduce growth in health care spending, and briefly consider the system-level regulatory structures necessary to oversee and control aggregate health care spending.