A discussion of the problems and range of alternatives available for developing incentives for medical care cost reduction. The major problems will be to develop adequate definitions of the output of medical care and measurements for the value of the attributes of alternatives. Incentives to control costs can vary by type, object, stage in the production process, or level of operations. An understanding of these differences and their possible combinations clarifies the range of alternatives. Some suggestions for specific areas for research include cost studies, productivity analysis, organizational structure analysis, capital allocation studies, alternative methods of production, and the effect of pricing policies. 21 pp. Ref.
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