The impact of hospital regulatory programs on per capita costs, utilization, and capital investment.
Regulatory programs are widely used to exert disciplinary force on rising health care costs. This study assessed the impact of three widely used regulatory schemes in the hospital sector between 1971 and 1977: prospective rate setting, certificate of need, and professional standards review organizations. Strong evidence was found that neither voluntary rate setting nor CON review exerted any constraining effect on costs per capita, utilization, and capital investment. A negative but statistically insignificant influence on costs was documented for mandatory rate setting. A substantial cost moderating effect was, however, documented for PSROs. Utilization review may thus be a useful mechanism to counterbalance the incentive of per case rate setting to increase admissions.
D002201:Capital Expenditures; D002567:Certificate of Need / Q000331:legislation & jurisprudence; D003365:Costs and Cost Analysis; D004469:Economics, Hospital; D005161:Facility Regulation and Control / Q000191:economics*; D006761:Hospitals / Q000706:statistics & numerical data; D011366:Professional Review Organizations / Q000331:legislation & jurisprudence; D011445:Prospective Payment System / Q000331:legislation & jurisprudence; D011907:Rate Setting and Review / Q000331:legislation & jurisprudence; D012044:Regression Analysis; D014481:United States