Cover: Health care cost containment in California and the future role of the physician

Health care cost containment in California and the future role of the physician

Published 1978

by Albert J. Lipson

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California should be cautious about enacting comprehensive rate regulatory legislation for hospitals. What is needed now is a period of experimentation with different methods to achieve cost containment, with the full participation of physicians. These conclusions are the outcome of a study of the California Health Facilities Commission conducted by the author (RAND Report R-2220). This study found (1) health facility cost regulation was determined by the response of the hospital industry to political pressure; (2) the Commission's behavior was substantially influenced by the Administration in power; and (3) there is a bureaucratic conflict between the Commission and the Department of Health. Future regulatory efforts will succeed politically only if a more effective constituency is mobilized, and managerially only if problems of technical implementation are solved. Physician cooperation is necessary to make cost containment a reality. They should work with others in the health industry to devise methods that encourage price and cost consciousness and reward those who practice cost effectiveness.

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