Tracking the Demise of State Hospital Rate Setting

Health Affairs

Volumn 16, Issue 1, 1997, Pages 142-149

  McDonough, John E ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

CAPITATION FEE; FEE; GOVERNMENT; HEALTH CARE POLICY; HEALTH INSURANCE; HEALTH SERVICES RESEARCH; HOSPITAL CHARGE; LEGAL ASPECT; POLITICS; REVIEW; UNITED STATES;

CAPITATION FEE; HEALTH POLICY; HEALTH SERVICES RESEARCH; HOSPITAL CHARGES; MANAGED CARE PROGRAMS; POLITICS; RATE SETTING AND REVIEW; STATE GOVERNMENT; UNITED STATES;

EID: 0347169671     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.16.1.142     Document Type: Article

References (29)

1. C. Coelen and D. Sullivan, "An Analysis of the Effects of Prospective Reimbursement Programs on Hospital Expenditures," Health Care Financing Review 2, no. 3 (1981): 1-40; and C. Coelen, S. Mennemeyer, and D. Kidder, Effects of Prospective Reimbursement Programs on Hospital Revenue, Expenses, and Financial Status (Cambridge, Mass.: Abt Associates, 1986).
2. C. Coelen and D. Sullivan, "An Analysis of the Effects of Prospective Reimbursement Programs on Hospital Expenditures," Health Care Financing Review 2, no. 3 (1981): 1-40; and C. Coelen, S. Mennemeyer, and D. Kidder, Effects of Prospective Reimbursement Programs on Hospital Revenue, Expenses, and Financial Status (Cambridge, Mass.: Abt Associates, 1986).
3. D. Crozier, "State Rate Setting: A Status Report," Health Affairs (Summer 1982): 66-83; and F.A. Sloan, "Rate Regulation as a Strategy for Hospital Cost Control: Evidence from the Last Decade," Milbank Memorial Fund Quarterly 61, no. 2 (1983): 195-217.
4. D. Crozier, "State Rate Setting: A Status Report," Health Affairs (Summer 1982): 66-83; and F.A. Sloan, "Rate Regulation as a Strategy for Hospital Cost Control: Evidence from the Last Decade," Milbank Memorial Fund Quarterly 61, no. 2 (1983): 195-217.
5. G.F. Anderson, "All-Payer Ratesetting: Down but Not Out," Health Care Financing Review (1991 Annual Supplement): 35-41. As evidence of the decline in health policy interest in rate setting, the five-year 1982-1986 Health Affairs index contained a separate category entitled "State Rate Setting" with seventeen references; the 1987-1991 index contained no such category and contained only two rate-setting references, both from 1987.
6. Sloan, "Rate Regulation as a Strategy for Hospital Cost Control."
7. See Anderson, "All-Payer Ratesetting," for an overview of the literature. Coelen et al., Effects of Prospective Reimbursement Programs on Hospital Revenue, Expenses, and Financial Status remains the most extensive national survey of all rate-setting programs. For evidence regarding the per capita effects of rate-setting programs, see J.A. Lanning, M.A. Morrisey, and R.L. Ohsfeldt, "Endogenous Hospital Regulation and Its Effects on Hospital and Non-Hospital Expenditures," Journal of Regulatory Economics 3, no. 2 (1991): 137-154.
8. See Anderson, "All-Payer Ratesetting," for an overview of the literature. Coelen et al., Effects of Prospective Reimbursement Programs on Hospital Revenue, Expenses, and Financial Status remains the most extensive national survey of all rate-setting programs. For evidence regarding the per capita effects of rate-setting programs, see J.A. Lanning, M.A. Morrisey, and R.L. Ohsfeldt, "Endogenous Hospital Regulation and Its Effects on Hospital and Non-Hospital Expenditures," Journal of Regulatory Economics 3, no. 2 (1991): 137-154.
9. J. McDonough, Interests and Ideas in Health Policy: The Fate of Hospital Rate Setting in Four States (Ann Arbor: University of Michigan Press, 1996), chap. 4.
10. N. Kraus, M. Porter, and P. Ball, Managed Care: A Decade in Review: 1980-1990 (Excelsior, Minn.: InterStudy, 1991); and Group Health Association of America, Patterns in HMO Enrollment, 3d ed. (Washington: GHAA, 1993).
11. N. Kraus, M. Porter, and P. Ball, Managed Care: A Decade in Review: 1980-1990 (Excelsior, Minn.: InterStudy, 1991); and Group Health Association of America, Patterns in HMO Enrollment, 3d ed. (Washington: GHAA, 1993).
12. W.C. Hsiao et al., "Lessons of the New Jersey DRG Payment System," Health Affairs (Summer 1986): 32-43; K.E. Thorpe, "Uncompensated Care Pools and Care to the Uninsured: Lessons from the New York Prospective Hospital Reimbursement Methodology," Inquiry 25, no. 3 (1988): 344-353; and J. Ashby, Achievement, Access, and Accountability: An Overview of Maryland's Twenty-two Years of Hospital Rate Regulation, 1971-1993 (Lutherville, Md.: Maryland Hospital Association, 1994).
13. W.C. Hsiao et al., "Lessons of the New Jersey DRG Payment System," Health Affairs (Summer 1986): 32-43; K.E. Thorpe, "Uncompensated Care Pools and Care to the Uninsured: Lessons from the New York Prospective Hospital Reimbursement Methodology," Inquiry 25, no. 3 (1988): 344-353; and J. Ashby, Achievement, Access, and Accountability: An Overview of Maryland's Twenty-two Years of Hospital Rate Regulation, 1971-1993 (Lutherville, Md.: Maryland Hospital Association, 1994).
14. W.C. Hsiao et al., "Lessons of the New Jersey DRG Payment System," Health Affairs (Summer 1986): 32-43; K.E. Thorpe, "Uncompensated Care Pools and Care to the Uninsured: Lessons from the New York Prospective Hospital Reimbursement Methodology," Inquiry 25, no. 3 (1988): 344-353; and J. Ashby, Achievement, Access, and Accountability: An Overview of Maryland's Twenty-two Years of Hospital Rate Regulation, 1971-1993 (Lutherville, Md.: Maryland Hospital Association, 1994).
15. S.M. Shortell and E.F.X. Hughes, "The Effects of Regulation, Competition, and Ownership on Mortality Rates among Hospital Inpatients," The New England Journal of Medicine (28 April 1988): 1100-1107; and G.L. Gaumer, E. Poggio, and C. Sennett, "Effects of State Prospective Reimbursement Programs on Hospital Mortality," Medical Care 27, no. 7 (1989): 724-736. Both found evidence, although not conclusive, of higher hospital mortality in rate-setting states. For a discussion of these studies' limitations and problems, see Anderson, "All-Payer Ratesetting."
16. S.M. Shortell and E.F.X. Hughes, "The Effects of Regulation, Competition, and Ownership on Mortality Rates among Hospital Inpatients," The New England Journal of Medicine (28 April 1988): 1100-1107; and G.L. Gaumer, E. Poggio, and C. Sennett, "Effects of State Prospective Reimbursement Programs on Hospital Mortality," Medical Care 27, no. 7 (1989): 724-736. Both found evidence, although not conclusive, of higher hospital mortality in rate-setting states. For a discussion of these studies' limitations and problems, see Anderson, "All-Payer Ratesetting."
17. S.M. Shortell and E.F.X. Hughes, "The Effects of Regulation, Competition, and Ownership on Mortality Rates among Hospital Inpatients," The New England Journal of Medicine (28 April 1988): 1100-1107; and G.L. Gaumer, E. Poggio, and C. Sennett, "Effects of State Prospective Reimbursement Programs on Hospital Mortality," Medical Care 27, no. 7 (1989): 724-736. Both found evidence, although not conclusive, of higher hospital mortality in rate-setting states. For a discussion of these studies' limitations and problems, see Anderson, "All-Payer Ratesetting."
18. For the record, the author participated in these deliberations as a member of the Massachusetts legislature in 1991 and opposed rate-setting deregulation.
19. See Health Care Financing in New York State: A Blueprint for Change (New York: United Hospital Fund of New York, 1993); J.W. Rodat, NYPHRM's Paradox: How New York's Attempts to Stabilize Hospital Finances Lead to More Uninsured, Increased Health Benefit Restrictions, Reduced Hospital Utilization, and Weakened Hospitals (Report sponsored by the Life Insurance Council of New York State, Inc. and the State Communities Aid Association, March 1995); S.M. Tully and A.A. Grannis, "Health and Health Care Financing in Transition: Proceedings of the Meeting of the Council on Health Care Financing," in Council on Health Care Financing, 1995 (Albany, N.Y.: Council on Health Care Financing, June 1995); and testimony received in conjunction with the Joint Hearing on New York's health care financing system in transition, sponsored by the Council on Health Care Financing and the Senate Standing Committees on Health and Insurance, Albany, New York, 24 May 1995.
20. See Health Care Financing in New York State: A Blueprint for Change (New York: United Hospital Fund of New York, 1993); J.W. Rodat, NYPHRM's Paradox: How New York's Attempts to Stabilize Hospital Finances Lead to More Uninsured, Increased Health Benefit Restrictions, Reduced Hospital Utilization, and Weakened Hospitals (Report sponsored by the Life Insurance Council of New York State, Inc. and the State Communities Aid Association, March 1995); S.M. Tully and A.A. Grannis, "Health and Health Care Financing in Transition: Proceedings of the Meeting of the Council on Health Care Financing," in Council on Health Care Financing, 1995 (Albany, N.Y.: Council on Health Care Financing, June 1995); and testimony received in conjunction with the Joint Hearing on New York's health care financing system in transition, sponsored by the Council on Health Care Financing and the Senate Standing Committees on Health and Insurance, Albany, New York, 24 May 1995.
21. See Health Care Financing in New York State: A Blueprint for Change (New York: United Hospital Fund of New York, 1993); J.W. Rodat, NYPHRM's Paradox: How New York's Attempts to Stabilize Hospital Finances Lead to More Uninsured, Increased Health Benefit Restrictions, Reduced Hospital Utilization, and Weakened Hospitals (Report sponsored by the Life Insurance Council of New York State, Inc. and the State Communities Aid Association, March 1995); S.M. Tully and A.A. Grannis, "Health and Health Care Financing in Transition: Proceedings of the Meeting of the Council on Health Care Financing," in Council on Health Care Financing, 1995 (Albany, N.Y.: Council on Health Care Financing, June 1995); and testimony received in conjunction with the Joint Hearing on New York's health care financing system in transition, sponsored by the Council on Health Care Financing and the Senate Standing Committees on Health and Insurance, Albany, New York, 24 May 1995.
22. For a discussion of the New Jersey system's problems, see S.L. Weiner and H.M. Sapolsky, Hospital Payment Reform: The Case of New Jersey 1980-1994 (Cambridge, Mass.: Massachusetts Institute of Technology, 1994). For a discussion of the New York system, see P.D. Jacobson et al., State Health Care Reform Initiatives: Progress and Promise (Santa Monica, Calif.: RAND, September 1994).
23. For a discussion of the New Jersey system's problems, see S.L. Weiner and H.M. Sapolsky, Hospital Payment Reform: The Case of New Jersey 1980-1994 (Cambridge, Mass.: Massachusetts Institute of Technology, 1994). For a discussion of the New York system, see P.D. Jacobson et al., State Health Care Reform Initiatives: Progress and Promise (Santa Monica, Calif.: RAND, September 1994).
24. Section 1814(e) of the Social Security Act, amended in 1987 and 1991.
25. See Health Care Reform Act of 1995, chap. 499, "Acts and Resolves," signed 25 May 1995.
26. J.W. Kingdon, Agendas, Alternatives, and Public Policies (New York: HarperCollins, 1984), 99-106.
27. For a discussion of the impact of ERISA on state rate-setting authority, see P. Butler, Roadblock to Reform: ERISA Implications for State Health Care Initiatives (Washington: National Governors' Association, 1994); and National Governors' Association, "Recent ERISA Developments: Implications of the Travelers Case for State Health Policy Initiatives" (Washington: NGA, 21 July 1995).
28. For a discussion of the impact of ERISA on state rate-setting authority, see P. Butler, Roadblock to Reform: ERISA Implications for State Health Care Initiatives (Washington: National Governors' Association, 1994); and National Governors' Association, "Recent ERISA Developments: Implications of the Travelers Case for State Health Policy Initiatives" (Washington: NGA, 21 July 1995).
29. United Wire, Metal & Machine Health and Welfare Fund v Morristown Memorial Hospital, 95 F.2d 500 (3rd Cir. 1993). Even though the 1992 Federal District Court decision was overturned by the Court of Appeals in 1993, the pool and the rate-setting system had been inalterably affected by the 1992 statutes.