Rate-Setting in Hospitals — The Beginning or the End?

Hospital cost containment is the most important and vexing health-care issue that the American health-care industry faces today. Current expenditures for patient care in hospitals exceed $60 billion annually, nearly 40 per cent of the amount spent for all forms of health care. These expenditures have risen at an extraordinary rate, quadrupling since 1965, doubling since 1975, and now reaching a figure approximating 9 per cent of the gross national product. The greatest concern is our failure to develop an effective method for controlling costs. We lack an approach that recognizes the necessity to maintain expenditures for health care in . . .