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- Title
Hospital Production -- Can Costs be Contained?
- Authors
Anderson, Charles E.
- Abstract
The article discusses the cost and output effects of regulatory structures imposed in the U.S. hospital industry. Although the modern hospital complex has been heralded as a center of medical care advancement and cure, its market performance has been faulted on several grounds. The criticisms which advocate hospital reform and structural reorganization at the industry level address problems of rising hospital costs, productive inefficiencies, and underutilized resources. The imposition of prospective rates will increase cost efficiencies among hospitals if hospital administrators are influenced by financial considerations and if the income of hospitals can be strongly related to operations. Under these assumptions financial incentives will determine administrative decisions concerning hospital operations. It is doubtful that a rate setting scheme can be employed effectively except within a broad and discretionary policy setting. Indeed the drawbacks of rate imposition are both structural and behavioral. The social management of a limited competition and a fully planned hospital industry differ critically in several respects, in summary, comprehensive health care proposals for fully planned hospitals advocate that the hospital sector be structured in the following manner.
- Subjects
UNITED States; HOSPITAL costs; MEDICAL care costs; COST effectiveness; INDUSTRIAL management; HOSPITAL administration
- Publication
American Economic Review, 1979, Vol 69, Issue 2, p293
- ISSN
0002-8282
- Publication type
Article